Eyewear start-up Lenskart's valuation crosses $1.5 bn with SoftBank deal

Lenskart is raising Rs 1,645 cr in a funding round led by Masayoshi Son-led SoftBank; company has cut losses by 73%, while driving revenue up 57% in FY19

Eye-wear start-up Lenskart said it was raising over $275 million from Softbank Vision Fund to augment tech capabilities and strengthen supply chain infrastructure.
 
Avendus Capital was the exclusive financial advisor to this transaction. Business signals platform Paper.vc on Friday said the deal gave the company a post-money valuation of about $1.5 billion. Lenskart is engaged in the manufacturing and supply of eyewear products.
 
“A large part of this investment will go towards building next-generation technology and supply chain to deliver billion glasses with the highest quality at the best price and most amazing customer experience,” said Peyush Bansal, founder and chief executive officer of Lenskart.
 
“We are thrilled to have Softbank Vision Fund with us in our journey. Their understanding of consumer and technology will help us build the next edition of Lenskart.”
 
Lenskart Solutions passed a Board resolution on December 12, approving the allotment of 22,976,465 (22.9 million) Series-G compulsorily convertible cumulative preference shares to SVF II (Cayman Islands) Lightbulb, a Cayman Islands-based entity that appears to be an investment vehicle of Softbank Vision Fund (SVF), according to the company’s regulatory filings sourced from Paper.vc. “According to the deal, SVF appears to be investing Rs 1,645 crore by paying Rs 714 per share (a 356x premium against face value) that we estimate gives the company a post-money valuation of $1.5 billion,” said Jayraj Patel, an analyst at Paper.vc.
 
Experts said the deal would allow the Delhi-based company to scale operations to more locations in small towns and overseas territories. The company is eyeing the big opportunity of 600 million Indians and 4.2 billion people globally who are affected by poor vision and need eyeglasses.  Lenskart, formed in 2010 with an aim to solve the problem of vision correction using technology, works like an e-commerce company where all glasses are customised. The firm said the products are made centrally in a state-of-the-art robotic and automated fulfilment centre to ensure the highest precision and consistency in its glasses.
 
Lenskart said it also coined the concept of free eye exams at home, office, online and within its stores conducting close to 15,000 free eye exams every day. The firm said its mobile app, which has over 20 million downloads, allows consumers to scan their faces and get the best-recommended frames that would suit them. 
 
“Vision correction is a large problem globally and we believe Lenskart with its unique approach will have a significant impact on the sector worldwide,” said Neeraj Shrimali, director, digital and technology investment banking at Avendus Capital.
  
The global eyewear market, which is made up of spectacles, contact lenses, sunglasses, and other eyewear products, was estimated to be worth around $131 billion in 2018 and was forecast to reach a value of $210.8 billion by 2025, according to data platform Statista.