The Sleep Company bets big on offline to have ₹1,000 crore in revenue by FY27
- With its big offline shift, The Sleep Company joins a list of other D2C startups like eyewear retailer Lenskart, cosmetics brand Mamaearth, and meat-delivery platform Licious that all began with a digital-focused strategy, but have now been investing heavily to grow offline.
The Sleep Company is betting big on physical stores to clock ₹1,000 crore in revenue by FY27, a top executive of the comfort-tech firm that makes chairs, mattresses, and recliner beds said.
The company, which is opening its 100th store this week, makes about 65% of its revenue from its offline vertical, while the rest comes from online sales. Back in October, it used to have a 50-50 mix of offline and online sales.
“This year we expect our store network to grow from 100 today to about 150 by March. We are opening one store every four to five days in India. We are currently present in 30 cities. These new stores would come in additional cities as well as, increasing density in the top cities,” Harshil Salot, co-founder of the company, told Mint.
The share of revenue coming from offline sales is expected to grow further as the company ramps up the number of stores, Salot said.
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The move follows a report by Accel and Fireside Ventures that suggests that investors no longer want to back domestic online-only direct-to-consumer brands, a category that had become a big draw for investors putting money in the Indian startup ecosystem till a few years ago.
With its shift of focus to offline, The Sleep Company joins a list of other D2C startups like eyewear retailer Lenskart, cosmetics brand Mamaearth, and meat-delivery platform Licious that all began with a digital-focused strategy but have now been investing heavily to grow offline.
The company, co-founded in 2019 by the husband-wife team of Harshil and Priyanka Salot, said it is on track to achieve Ebitda (earnings before interest, taxes, depreciation and amortization) profitability in FY25. The company said it clocked a revenue of about ₹335 crore in FY24. To be sure, the company is yet to file its FY24 financials with the ministry of corporate affairs.
The company is also ramping up its advertising expenses to achieve the ₹1,000 crore milestone. The Sleep Company, which spent close to ₹70 crore in the year ended March 2023 on advertising, plans to spend ₹85 crore in FY25. “While 75-80% expenditure will be on digital platforms, traditional media spending will be around 20-25%,” Salot added.
The company is planning to venture out of India, starting with the United Kingdom, where it is investing to explore a product market fit. “Our idea is that if we are able to achieve that, we will expand to a lot more other countries in Europe and North America,” he said.
However, Salot said that the revenue from abroad will take a few years to start flowing in and most of the revenue over the next couple of years will come from the Indian market itself.
The Sleep Company had last raised ₹184 crore in a Series C funding round from existing investors Premji Invest and Fireside Ventures.
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Business NewsCompaniesThe Sleep Company bets big on offline to have ₹1,000 crore in revenue by FY27
First Published:11 Jul 2024, 06:00 AM IST
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