India’s fast-growing economy means more people are moving to urban areas and getting on the housing ladder. That in turn has produced a series of companies that use the internet to help home owners and renters outfit their places of residence with furniture. Pepperfry is one such company, and today it announced that it has raised $31 million to build out its business across India.
The four-year-old company was started by ex-eBay executives Ambareesh Murty (CEO) and Ashish Shah (COO) who “decided to turn entrepreneur and make the most of the e-commerce potential in India,” Murty told TechCrunch.
Murty pegs the market for interior design in India at between $30-$40 billion per year and he believes that it is ripe for disruption.
“India is fairly underserved when it comes to organized retail and [the market for furniture is] exceedingly fragmented. The top five brands account for just four percent of all sales,” he added in an interview.
Pepperfry has raised nearly $160 million from investors to date, and this latest round was led by existing backers Goldman Sachs, Bertelsmann India Investments, Norwest Venture Partners and Zodius Technology Fund. Last summer, Goldman led the company’s $100 million Series D.
Pepperfry claims to offer products from more than 10,000 partners — including its own-brand — across verticals such as furniture, home decor, kitchen and dining, and pet supplies. Beyond selling online, the company operates a number of experience centers which are staffed by interior design experts and open to customers seeking ideas or input about their home. Murty said the company is aiming to increase its current 10 experience centers to as many as 30, taking them into tier-two and tier-three cities in India.
The company also wants to expand its logistics, too. Currently, Murty claimed, it can reach around 500 cities in India, but it plans to increase that to 1,000 before this year is out by investing in its logistics network. Pepperfry built its own delivery system, including its own last-mile fleet, because when it first started because “there was nobody in India capable of delivering big boxes to consumers,” he explained. Today, that stands at 17 fulfilment hubs and a delivery fleet of more than 400 vehicles.
In line with that, the company is also doubling down on tech with plans to increase its engineering numbers from 50 to 100. Already, its app support augmented reality — you can preview a new sofa, for example, simply by pointing your phone’s camera at the space you wish to put it in — and Pepperfry plans to integrate more virtual reality technologies into its product, and potentially its experience centers, too.
When I asked whether he might follow the rental model that Rentomojo offers to appeal to young workers with lower spending power, Murty explained that he believes demand is higher for permanent ownership of furnishings in the longer term.
“We estimate that the rental stage is only three to four years before consumers begin buying furniture for themselves,” he argued. “If we drive and give customers amazing value even on products they buy, why would they rent?”
Likewise there’s no plan to expand the focus outside of India at this point, as you might have gathered from the company rural expansion ambitions.
“India is a young country where consumption is increasing at a rapid rate,” Murty told TechCrunch. “Our focus over the next couple of years will remain the Indian market, then we’ll see.”
What is on the roadmap, however, is a profitability.
Murty, who predicted that this round might be the last corporate financing that his company does, said Pepperfry is targeting profitability before marketing costs within the next six months. If that goes to plan, he believes it can be “absolutely breakeven” within the next two years.
“We’re lucky to have investors with the rationale to think long term and execute long term, too,” he said.