MC Interview: IPO not an exit event; Being a Promoter has an emotional angle: Lenskart’s Peyush Bansal

In a virtual interview from New Delhi, Bansal reflected on why being a promoter is emotional and important to him, why every D2C brand needs to have global ambitions and why being discontent anchors the Lenskart DNA.

Edited excerpts.

What has the sentiment around your IPO been like? What have fund managers from Dalal Street and investors told you?

I think it almost feels like day zero, what we did maybe a decade back. This is a new exercise of building a fresh set of investors, selling them the story, making sure they understand it really well. Also tell them what the team is like, what the culture is, what technology we are building, the vision of the company and everything else. It's a fresh start in many ways. It almost feels like day zero.

Some argue that Lenskart’s primary fundraise is small and the offer for sale (OFS) portion is relatively larger. Is there a reason for that? 

That is because the company has decent money on its balance sheet already and is generating profits and has a positive cash flow. So, we only needed a little bit more for certain specific activities. And that is why we are not raising more than what we need to do in the near term, at least.

Lenskart’s grey market premium (GMP) is positive, there is endorsement from stock market wizards like RK Damani and SBI MF. Are you happy with the direction so far?

IPOs are less about valuation, if you ask me. They are a milestone to build something larger. Valuations don’t decide whether an IPO is good or not. At least it won't really matter to me, or the company, in the long term.

I have been a huge fan of Mr. Damani. I've had the privilege to meet him. It is definitely exciting to have his vote of confidence, his partnership and his guidance in the long term.

We are really blessed with the kind of partners we have had so far, including ADIA, SoftBank, Temasek, Kedaara Capital, ChrysCapital, KKR and Steadview. And I think we are now looking at building a similar set of partners for the future.

You are also one among a rare breed of founders who have chosen to be a Promoter at Lenskart. The previous crop of founders didn't do this. What was the thinking and what drives your conviction around Lenskart? 

From a founder's perspective, to be promoters, to be logged in is the right thing to do. Like I said, this is not an exit event for anyone. This is a milestone to build something larger. So from that perspective, I think it is also emotional to me in many ways. I mean, for me and my co-founders, it's difficult to explain, but there is an emotional angle to being a promoter.

When you say “emotional angle” does it also mean you have more control over your destiny? 

I don't know that. I don't know whether it gives me more control. It definitely ensures I have more skin in the game. I am all in just like everybody else. It gives that feeling, that this is it.  This is what I'm committing myself to do. And we are going to do this for the long term while staying committed. There'll be ups and downs in that journey, but we will stay the course.

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Lenskart is also one of the most profitable startups to go public. Is that helping you? Investors are attaching a lot of importance to startups that are profitable and have a track record of profitability. 

See, I don't know what gives investors’ confidence. It's not my job. I overall feel that we need to create a lot of value for the customers. And if you're creating value for the customers, profit is just a byproduct of that process.

I also feel that we are not in the battle of whether we are in the red or in the green as a company. We dream and aspire to create a very long term, sustainable organisation that can be there for decades to come. We want to improve the lives of people, create shareholder value. So in that perspective, I've always felt that that's the wrong battle to fight, whether you are in the red or in the green.

We want investors to start thinking about how Lenskart is going to give a vision to a billion people? How can it transform the way people see in India? How is it going to eradicate visual impairment? Short term thinking is not what I am so comfortable with individually at Lenskart. I don't want to be myopic.

The IPO aside, what are your goals going to be for the next 6-12 months? 

The only way to solve this problem is to democratise eye testing. Today India has only 30 optometrists for a million people. And even in Asia, the numbers are somewhere in that ballpark. We'll never be able to solve this problem. So I think one big focus area for Lenskart is: how do we use technology to democratise eye testing?

Now the idea is to increase supply. We have invested in remote optometry. We are testing if one optometrist, doing 10 eye tests currently, can do 30, 40 eye tests in an eight hour shift day.

The second is: we have to build capacity. I mean, it's almost like what Jio did. They laid the optic fiber before to enable the 5G ecosystem in India. For us, we have to lay the optic fiber. In India, we do not have a supply chain ecosystem to manufacture 100, 200 million pairs of glasses every year.

The entire ecosystem is kind of right now not in India, whether it is frame manufacturing, whether it is lens manufacturing, a lot of it is imported. A lot of it is maybe not at par with global standards and then customers are looking for imported products. We at Lenskart need to make in India and be able to solve this problem.

And lastly, smart glasses are an interesting space. We continue to stay invested there. We are investing a lot in R&D. We launched our Bluetooth glasses. We are working on our camera version, which should be out soon.

On that point, Meta picked up some stake in Ray Ban maker. We've heard about your collaboration with Qualcomm. Can you tell us more? AI will soon become a very important theme. Investors will use that to derive valuations and multiples later on. Your views?
Smart glasses are all about eyewear, an area that we love. A good chunk of commerce and social media moved on the phone, away from a laptop. Similarly, there will be areas which will be a lot more convenient to do on the glasses. Payments is one case in point.

We have tied up with Qualcomm because we fundamentally believe that Lenskart is a tech company. We have over 500 plus engineers and we want to own this. This is a very exciting moment for us. Maybe even more exciting than the IPO in many ways. I mean, AI has given wings to Lenskart. We talk about it all the time. And smart glasses are like the cherry on top of the whipped cream in many ways.

We want to own the full stack. In India, we have had very few full stack companies. But we would want to attempt it. India has all the talent.

You're taking on a global giant like Meta with very, very deep pockets. What's going to be your differentiator? Is it going to be affordable access? Or the full stack strategy you spoke about from the chip level.

I don't think we are taking on anybody. I don't believe that. I don't obsess about competition. We are working towards what we have. We have access to customers in India and direct access because of the over 100 million plus downloads Lenskart has. We understand these customers and their needs. We can iterate on this much faster. We can be nimble. We can be agile. And we can learn from our customers. We fail many times. But our customers have put a lot of faith in us in the past. So that's what we are banking on. We're not trying to compete with anybody.

One thing that's really impressed investors is your diversification. About 40 percent of your revenues come from international markets. What geographies will you focus on? How will you spend time and how do you divide time between India and markets outside India?

The problem in India is big but the problem in Southeast Asia, Japan and the Middle East is also equally big. In a country like Singapore, 80 percent of the people get myopic by the age of 18. So, the problem is becoming very big.

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Internally, we believe and say that as a consumer brand either you are a global brand or you're not a brand at all. India is creating a lot of D2C brands but I would urge these D2C brands to become global brands, because in the long term, consumers want the best. We need to raise the bar of our brands, whether it is product quality, or the finesse, the communication, or whether it is marketing.

Your IPO papers show revenue growth in the 17 to 20 percent range. Will that sustain? Or does Lenskart have room to grow further than that? What is your sweet spot?

I can't comment on future revenue growth. In the past, there was a point where our revenues were compounding at about 30 percent in the past two years. But, yeah, we will leave that to the outcome. As far as input is concerned, we will continue to build capacity for eyewear.

Will you also look at M&As, like in the past, as a way to grow your revenues? Will that be a path you are willing to take?

We don't acquire for growth in revenue. We had acquired Owndays purely from a perspective of having a very high quality D2C brand in the portfolio.

Second, our endeavor is to really make eyewear accessible in Asia, where the problem is very large.

One argument stakeholders are making is that Lenskart's assessment of 500 to 700 million the total addressable market (TAM) has been a little on the higher side. What’s your view? 

My answer to that is it doesn’t matter. My co-founder says: 'Ki farak painda hai? (What difference does it make?)' It doesn't matter what the TAM is beyond the point. You go to any place and you do an eye test of 10 children, 10 adults and you can know what the TAM is. You don't need so many monitors and reports to do that. I don't get into this beyond a point, I don’t track it, I think this is an analyst’s job.

Around 10 years back when Chiratae Ventures had invested in us, a lot of the people used to say that the eyewear market in India is at $1 billion and I just couldn't get it. Even at those days I just couldn't get it how that number matters but I always used to say it doesn't matter. If it is Rs 5,000 crore, we can give vision to 50 percent of India and that is a sizable impact to create and so our job is not changing because of that.

What do you think helped you build a more enduring company compared to those who started out at the same time as you which may have flamed out? 

For Lenskart, one thing that helped us was being very purpose-driven. Just having a clear focus on why we come to work every day and having that singular focus, which was not about business but it was about creating impact in the lives of people. It has really allowed us to stay coached, not get distracted. Even on the tougher days, just do the right things and not do everything that may look great in that time. That long-term focus comes with that purpose.

Next most important thing: people and culture. As we build off charts, as we build talent into the ecosystem, how we take those decisions in the company, it is really important. When everybody comes to work every day with a common purpose, it doesn't become about oneself, it becomes about that purpose and that becomes stronger and stronger. So I would attribute it to that.

If you have to release a book on Lenskart and Peyush Bansal. A) Will you do it? B) What will it be called?

I won't do it anytime soon because I think the bar of what we want to achieve and what we have achieved, we are far away from that. Zomato is definitely in a different space and league right now. We are not there and we are a far mile from the mission that we set out for and we are very discontent right now. So, I would not release a book anytime soon. So it's not appropriate for me to comment on the title of the book.