This entrepreneur's sleep-tech firm became a Rs 2,000 cr brand amid Covid

His business has accelerated three-fold as people work from home during the pandemic and are investing in their health

Chaitanya Ramalingegowda’s job is to ensure that people sleep peacefully through his sleep-technology and mattress brand Wakefit.co. But as a founder, it has been a constant struggle for him to be able to get the daily 9-hour sleep. After the Covid-19 outbreak last year, followed by pandemic-related restrictions, he had to double down on everything to ensure the business remained afloat. His efforts paid off. The coronavirus pandemic has now accelerated his business three-fold as people work from home and are investing in their health. This is also because people have been impacted by stress, health risks, and career turbulences due to the pandemic. Sequoia-backed Wakefit is now valued at about Rs 2,000 crore, which is a 10-fold increase in the last one year, not witnessed in any other consumer brand. 

“When the first lockdown was announced, we were very worried. We doubled down on cost savings,” said Ramalingegowda, who co-founded the firm along with Ankit Garg in 2016. “Having money in the bank gave us the confidence to say that ‘we will not layoff any employee and if the lockdown extends beyond three months, we will take a collective pay cut, with the founders taking the largest salary cut.”

The firm also quickly worked with the insurance companies and produced Covid-related insurance for every single employee within the four days of the lockdown.

The company had plans to launch furniture products over a 12 month period but those plans got impacted due to the lockdown restrictions. It started the process of doing research and development for the products remotely and virtually built relationships with sourcing organisations in India and globally. It was able to bring the machinery once the lockdown was lifted.

“What was supposed to be a 12-month launch cycle, we completed it in 50 days,” said Ramalingegowda. “We launched all of the categories at one go. We just went crazy in terms of speed.”

Wakefit witnessed three-fold growth and has now crossed Rs 450 crore in revenue. The source of revenues also evolved. Now almost 50 per cent of the demand is coming from tier 2 and tier 3 cities and towns. Earlier most of its revenues would come through selling mattresses and sleep accessories. Now the newly launched furniture category which includes products such as sofas, wardrobes, study and coffee tables contributes 20 per cent to its revenue.

The other big challenge that the company was facing is the dependence on third-party delivery and logistics firms. They would give more preference to large e-commerce companies such as Amazon and Flipkart for their services compared to smaller firms including Wakefit. This includes offering more stringent service level agreements and dedicated technology teams to the big players. This is because there is a risk for delivery firms to lose large deals compared to working with smaller companies. 

“For example, they (delivery firms) have rules to pay the penalty if they don’t deliver  98 per cent of the packages for Amazon and Flipkart,” said Ramalingegowda. “If we talk in the same way for at least 95 per cent of predictability for delivery and ask for penalty if they don’t achieve it, then they don’t want to work with us, because we are too small (in terms) of business for them.”

About nine months ago, Wakefit was only able to do local deliveries through its fleet of vehicles in Bengaluru. In other parts of the country, it was dependent on large logistics partners. To address this challenge, Wakefit invested deeply in logistics and delivery network in the last 9 months. This includes setting up 22 warehouses across the country. It took a data-led approach to focus on the pin codes where most of the orders generate. The technology-enabled warehouses provide insights to the customers about the status of their packages. The strategy is paying a dividend as it is able to quickly serve over 19,000 pin codes.

In terms of research and development, Wakefit has been focusing on the science of sleep and ergonomics. All these insights go into building products such as mattresses, pillows, bedsheets, comforters and furniture. An inhouse R&D team looks at aspects such as stress testing, airflow, humidity and temperature management of the materials. It also holds sessions with sleep researchers from various organisations including the National Institute of Mental Health and Neuro-Sciences (NIMHANS) about how various elements such as parts of the mattress, spinal alignment and lifestyle can impact the quality of sleep. For instance, the mattress would have a layer which has seven different pressure zones for various parts of the body such as neck, shoulder, hips and ankle. 

Wakefit also has a ‘Sleep Internship Programme’. It is a unique employment opportunity for individuals to apply for a paid position, where all that’s expected of them is deep, uninterrupted sleep for 9 hours, every night for 100 nights in return for a handsome sum. After a rigorous selection process, a group of super sleepers or passionate sleepers will be selected to be part of the Wakefit Sleep Interns Batch of 2021-22. This year, the company had said that selected sleep interns will not only earn Rs 1 lakh but the pool of interns will get to compete with each other too, for a grand prize of Rs 10 lakh. The aim is to showcase the positive impact of quality sleep on life.

“These are people who say ‘they don't want to watch the new Netflix series or attend the late-night party’ as they want to get their 9 hours of sleep,” said Ramalingegowda. 

Despite his hectic schedule as a founder, Ramalingegowda himself is making a lot of efforts to remain fit by walking over 15,000 steps each day and get 9-hours of sleep. Wakefit is expecting to cross Rs 1,000 crore in revenue by 2023. When asked if Wakefit has any plans to go public, Ramalingegowda said the company is not in any hurry.

“Ankit (Garg) and I are failed entrepreneurs, both of us had startups that had to shut down.  Now this is working and we are enjoying building it,” said Ramalingegowda. “We would rather build the company to a much larger scale for the next 4  years and then think about IPO.”