 "Pepperfry raises Rs 210 crore to expand into smaller towns")
Mumbai-based online furniture marketplace Pepperfry has raised Rs 210 crore (approx 31 million) in fresh funding from existing investors Goldman Sachs, Bertelsmann India Investments, Norwest Venture Partners and Zodius Technology Fund, as it looks to expand into tier 2 and tier 3 towns in India.
Pepperfry will utilise the capital to expand its supply chain and logistics network to cater to demand in over 1,000 cities over the next few year.
In the coming months however, the company will look to extend its offline presence with Pepperfry Studio stores in smaller Indian towns and cities.
"Our mission is to help 20 million customers' create beautiful homes by 2020. We are doing this through a differentiated, profitable business model and I thank our investors for believing in the team and for being great partners on this journey," said Ambareesh Murty, Founder & CEO of Pepperfry, in a statement.
The company, which competes directly with UrbanLadder and Livspace says it is the largest player in India's online furniture space.
Pepperfry has so far raked in close to $160 million in funding, more than twice the $77 million Urban Ladder has raised so far.
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The company claims in the last five years, more than three million customers have made purchases from over 10,000 merchants on the Pepperfry platform, leading it to a position of dominance in the online furniture and home segment in India.
As the demand for furniture kicks off online, larger horizontal players such as Flipkart, Snapdeal and Amazon too are vying for a piece of the action.
Last week Urban Ladder announced that it would begin selling its products on Amazon, helping it reduce marketing costs and tapping the US retailer's massive India user base.
"Pepperfry has continued to successfully innovate, grow its business and deliver on the macro theme of domestic consumption growth in India. In partnership with the talented management team, our goal is to establish a differentiated and sustainable leader in India's rapidly growing ecommerce industry," said Ankur Sahu, Co-Head of Private Equity at Goldman Sachs in Asia.
As online furniture retailers are being to push the boundaries of growth, they're coming up against a wall in terms of user experience.
When it comes to big ticket purchases such as furniture, users still prefer to touch and feel products, forcing all online players to sink their teeth into opening offline experience outlets.
While Pepperfry has its own brand of stores, rival Urban Ladder and Livspace too are planning an expansion into the offline world.
Earlier this month Urban Ladder submitted an application to the Department of Industrial Policy and Promotion to open single brand retail stores. The Bengaluru-based company says it will use the stores to experiment with a experience offline, buy online model.
Online retailers going offline isn't a wholly new concept in India. Online eyewear brand Lenskart has opened up stores across several cities in India and functions on a franchisee model to reach out to more customers.
While India's e-tailers are dabbling with the idea of offline stores, there's a fear that they could lose out on the cost advantage they've had over traditional offline players.