Lenskart's $600 mn funding gives early investors including SoftBank a big exit

LENSKART

Eyewear startup Lenskart's $600 million funding across two rounds this year, has given a bunch of the company's existing investors including SoftBank a big exit, in a rare occurrence of a liquidity event amid a worsening funding winter.

Lenskart raised $500 million in March from a wholly-owned subsidiary of Abu Dhabi Investment Authority (ADIA) and $100 million on June 15 from ChrysCapital. Of the total $600 million, about 80 percent or $450-500 million was raised in secondary sales, according to a person with direct knowledge of the matter. The balance $100-150 million was a primary fund infusion, the person said.

Chiratae Ventures, Premji Invest, Ronnie Screwvala-led Unilazer Ventures, Kedaara Capital, SoftBank and KKR, partially sold their stakes to ChrysCaptial and ADIA during the two rounds, the person quoted above said. The secondary share sale happened at a 20-25 percent discount (about $3.7-$3.8 billion) to Lenskart's current valuation of about $4.3 billion.

With the latest funding, Lenskart has raised over $1.6 billion, of which nearly $850 million was raised in the past year alone as the Gurugram-based company managed to buck the much-talked-about funding winter amid a deteriorating macroeconomic environment.

While a large part of the funding was secondary, the primary infusion has given it ammunition to take on giants like Tata's Titan Eyeplus and prepares for Reliance Retail's entry into the space.

The primary infusion will also help the Peyush Bansal-led company to expand its offline presence as an increasing number of D2C startups look to accelerate their omnichannel strategy.

The eyewear market is also populated with other players like Coolwinks, Lawrence & Mayo, GKB Lens, Ray-Ban and several others, making it even more challenging for Lenskart to scale.

In March this year, Mohit Arora -- who spent about nine years at Lenskart -- quit the company and joined Reliance Retail to lead a luxury brand for the group.

To scale its operations, Lenskart said a new factory, where it will manufacture and ship 20 million pairs of eyewear next year, will also be ready to operate soon. During its last fundraise, the company claimed it grew its revenue by 60 percent for the second year in a row and is now profitable.

That remark was after Lenskart slipped into losses in FY22. The startup reported a loss of Rs 102 crore for the year, against a profit of Rs 28 crore in FY21.

The SoftBank-backed omnichannel brand recorded an operating income of Rs 1,503 crore in FY22, an increase of 66 percent from last fiscal, according to its Registrar of Companies (RoC) filings sourced from Tofler.

Showing conviction, the PE firm said investments into Lenskart will support its growth plans and strengthen the company's position as a global eyewear leader.

“..With the help of technology, customer centricity, and big investments in supply chain and talent, we can eradicate the problem of vision correction. Eyewear as a lifestyle category is at a very early stage in its evolution, and there is a lot of opportunity to make glasses that can uplift our quality of life significantly as seen in shoes, apparel, and watches,” said Peyush Bansal, co-founder and CEO of Lenskart.

With a customer base of 20 million customers, Lenskart continues to widen its reach within India, it said. The company added that it is also expanding internationally across markets in Asia and the Middle East, among other regions.

"ChrysCapital is excited to back a strong execution-focused management team that has established dominant market leadership in the eyewear segment… With the acquisition of Owndays, there is an opportunity for Lenskart to expand across over 10 Asian countries in addition to the already large Indian market," said Rajiv Batra, senior vice president, ChrysCapital Advisors.

Avendus Capital was the exclusive financial advisor to Lenskart and its shareholders, as per the statement.

Founded by Bansal, Amit Chaudhary, Neha Bansal and Sumeet Kapahi in 2008, Lenskart entered the coveted unicorn club in 2019. It counts SoftBank, Alpha Wave Global, Temasek, KKR and TPG among others as its backers.