Wakefit FY24 revenue rises 25% to Rs 1,017 crore, losses down 90%

Chaitanya Ramalingegowda, co-founder, Wakefit

Direct to consumer (D2C) home and sleep solutions company Wakefit's revenue rose 24 percent from the previous year to Rs 1,017 crore in FY24, co-founder Chaitanya Ramalingegowda told Moneycontrol. The Bengaluru-based startup also cut its losses by 90 percent during the year.

Wakefit’s net loss was down to Rs 15 crore in FY24, helped by a better control over costs. The company also improved factory utilisation, which helped in improving margins, Ramalingegowda said.

The improvement in financial health comes at a time when investors are nudging companies to rely less on external capital and instead turn in profits or at least establish a path to profitability.

“Our investors are extremely satisfied with our year-on-year (YoY) performance but we, founders, always feel we can grow more than 25 percent. A 25 percent increase YoY is also healthy. It essentially means that on a top line of over Rs 1,000 crore – we’re adding business of Rs 250 crore per year,” Ramalingegowda said.

The current fiscal would be better as the company is seeing a rise in discretionary spending. “During COVID, people were more inclined towards saving their money but now their spending capacity has gone up,” he added.

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Revenue will increase another 30 percent in FY25 to Rs 1,320-Rs 1,400 crore, he said, adding even as the company aims for growth, it will be a frugal business.

Started in 2015, Wakefit was EBITDA profitable until 2019 but then the firm prioritised growth over profitability. In FY24, it, however, “marked its return to profitability, with an EBITDA of Rs 65 crore”.

Wakefit, which sells on e-commerce platforms like Flipkart and Amazon, said 30-35 percent of its sales comes from these marketplaces and the remaining around 65-70 percent come from its physical stores and its website.

The company plans to expand product categories, strengthen its omnichannel presence and improve brand visibility. The company has over 80 stores and will increase the count in the coming months.

“Most of the $40 million we raised in 2023 sits in our bank accounts so capital is not a challenge for us,” Ramalingegowda said.

A few months ago, Wakefit also saw Elevation Capital participate in a $10-12 million round where the investor bought shares from the ESOP pool and made its way to the company’s cap table.

The company has raised around $150 million in funding from marquee investors including PeakXV (previously Sequoia Capital India), Verlinvest, SIG, Investcorp and Elevation Capital.