The omnichannel eyewear retailer has now raised a total of $315 million in this round with private equity major
KKR having invested $95 million through a secondary transaction recently.
Lenskart’s existing investors TPG Capital and World Bank’s International Finance Corp. (IFC) have sold parts of their holdings in the Ghaziabad-based startup in this latest capital infusion, which was split equally between primary infusion and secondary share sale. In a secondary share sale, the capital does not flow into the company coffers as new investors use the capital to buy stakes from existing investors, who exit partially or fully.
Launched in 2010, Lenskart is now valued at $2.5 billion, according to Bansal, who said the company will use a majority of the funding to expand into Southeast Asia and Middle East.
This will include both organic and inorganic expansion, the company also plans to expand further within India. The aim is to become the number one player in overseas markets through online and offline presence, Bansal said.
“Temasek and Falcon Edge Capital are very strategic to Lenskart in terms of what we want to do in Southeast Asia and the Middle East. Temasek is a strong fund with very good knowledge of the Southeast Asia market and Falcon has high knowledge of the Middle East market,” he said, explaining the rationale behind bringing these investors on board.
SoftBank is the largest investor in the company with around 20% stake.
Chiratae Ventures, an early investor in Lenskart that sold stakes in previous funding rounds, has reinvested in the company along with Bay Capital. Chiratae Ventures had invested in Lenskart when it was valued at around $10 million.
ET was the first to report about Lenskart’s $300 million funding round in its May 17 edition.
Aggressive overseas growth
Lenskart estimates that it is among the top-three eyewear retailers in Singapore and aims to secure the top spot in the next 12-18 months.
“We are being super aggressive. In Singapore, we have nearly 25 stores, which in that country is the second largest chain in this space,” said Bansal, who is looking to accelerate the expansion beyond Singapore into markets like Vietnam, Thailand, Indonesia , Malaysia and the Philippines.
“We are bullish on the Southeast Asia market after what we have seen in Singapore and now after two waves of Covid-19,” he said. It’s a robust market and we are able to create that change that we have brought in India for making eyewear fashionable and increasing our repeat rates, virtual trials and making the glasses affordable.”
In the Middle East, Lenskart has hired a team and set up its online platform and will start setting up offline stores as well.
Navroz Udwadia, co-founder and partner at Falcon Edge Capital, who said that the fund is looking forward to working closely with the Lenskart team in scaling business internationally, especially in the Middle East and North Africa region, credits the Indian company’s “world-class fully backward-integrated omnichannel eyewear retail experience with extreme customer centricity,” for what he termed as the company’s “distinctive NPS (net promoter scores), best-in-class customer repeats and retention as well as store productivity.”
Avendus Capital was the exclusive financial adviser to Lenskart for this deal.
IPO plans and India growth
Lenskart is also warming up to list on Indian bourses over the next two-three years, Bansal told ET and might consider raising another round before going public here. “This could be the second last round we raise (before an IPO),” he said.
Commending the positive impact on the Indian startup ecosystem from the IPO’s of
Paytm, Bansal said “this will really fuel more capital in the country and more startups getting created. This is a win-win situation and will allow Indian companies to go global.”
In India, Lenskart’s primary market has seen a strong recovery since the number of Covid-19 cases ebbed after the deadly second wave of the pandemic. Bansal expects 20% higher sales in July compared to the January-February of this year.
“Our overall plan was to grow more than 50% this year and if all goes well we should get there but with the pandemic around you can’t predict these things beyond a point. India is looking strong and we are seeing business bounce back very fast after the second wave. The run-rate is also growing–currently at around $200 million,” he added.
The company plans to open around 300 new stores which will take its total store count to more than 1,000—most of them in India.
In June, the eyewear retailer
set up a ‘Lenskart Vision Fund’ with a corpus of around $20 million to invest in startups in the area of eye testing technologies, omnichannel technology solutions across in-store automation, logistics, supply chain, merchandising, marketing, and deep tech solutions for eyewear, retail and e-commerce.