The Sleep Company raised INR1.84bn in a Series C deal led by Premji Invest and Fireside Ventures

The Sleep Company, a Mumbai-based startup specialising in sleep solutions, has recently secured INR1.84bn (~A$33.6m) in a Series C funding round. This investment was led by existing investors Premji Invest and Fireside Ventures.

Transaction Snapshot

  • Deal Value: INR1.84bn (~A$33.6m)
  • Deal Type: Series C
  • Investors: Premji Invest, Fireside Ventures
  • Founders: Harshil Salot, Priyanka Salot

The Sleep Company is experiencing significant growth, with Co-founder Harshil Salot revealing that the company is now valued at more than double its previous funding round. This financial milestone comes one year after raising nearly INR1.78bn (~A$32.5m) from the same investors. The company, co-founded by Harshil and Priyanka Salot, aims to achieve profitability by the end of FY25.

In the past year, The Sleep Company has witnessed a business growth of 2.6 times. The founders plan to use the new funding to diversify their product offerings, which currently includes mattresses equipped with their patented 'SmartGRID' technology. The company started as a direct-to-consumer (D2C) brand in 2019, offering pillows, cushions, sheets, and chairs. In March 2022, it expanded to an omnichannel model, opening its first offline store in Bengaluru.

Presently, The Sleep Company operates over 60 retail stores and 16 experience centres across more than 20 cities. Plans are underway to open a total of 100 stores in the next six months, with a focus on Tier II and Tier III markets. Offline stores, which contribute 50% to the business, are a significant part of the company's expansion strategy. Harshil Salot indicates that a considerable portion of the investment will be directed towards distribution and footprint expansion.

In FY23, The Sleep Company reported revenues of approximately INR1.30bn (~A$23.7m), with projections of nearly INR3.50bn (~A$63.7m) for FY24. The company's success is attributed to innovation, efficient customer acquisition costs (CAC), and a strong omnichannel presence. Additionally, their focus on backward integration and in-house manufacturing allows for competitive pricing.

The Sleep Company's impressive growth includes a 6X increase over two years, reaching an annual recurring revenue (ARR) of over INR3.50bn as of September 2023. This growth is a substantial rise from INR600m (~A$10.9m) in November 2021.

Investors have expressed their confidence in the company's growth trajectory. Varun Khandelwal from Premji Invest commended The Sleep Company's aggressive omnichannel growth and strong unit economics. Dipanjan Basu from Fireside Ventures highlighted their exceptional growth trajectory and consistent profitability as key reasons for their continued investment.

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