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Urban Ladder to raise $40 million in new round of funding

Chief executive Ashish Goel said that they spent the last year testing their offline model. He says that now that they know that this works, they are going to expand their offline stores aggressively.

twitter-logo BusinessToday.In   New Delhi     Last Updated: September 4, 2018  | 18:55 IST
Urban Ladder to raise $40 million in new round of funding
PC: Urban Ladder/Facebook

Online furniture retailer Urban Ladder is planning to raise $35-40 million to expand their offline presence, adding outlets in Mumbai, Chennai and Pune by January. The pioneering company secured a single-brand retail trade licence last year and opened six large-format stores in Bengaluru and Delhi-NCR. These stores currently contribute more than one-third of its total revenue.  

Chief executive Ashish Goel said that they spent the last year testing their offline model. He says that now that they know that this works, they are going to expand their offline stores aggressively.

According to a report in The Economic Times, Urban Ladder's earnings before interest, taxes, depreciation and amortization (EBITDA) pulled up by 70% in the past 12 months. He credited the single-brand trade licence for contributing significantly to the company's growth.

The single-brand retail trade licence allows Urban Ladder to get products directly from manufacturers, stock it and eventually sell it directly to consumers. But as an online platform it would only enable other traders to sell their products.

The company also designs products, which are then outsourced for manufacturing.

Goel expects the company to be operationally profitable at the EBITDA level by the first quarter of fiscal year 2019-20. Goel said that they were getting into the zone of single-digit EBITDA and are 7-8 months away from EBITDA zero.

As mentioned in a report in the daily, industry experts estimate Urban Ladder's monthly sales from it Bengaluru stores to be around Rs 7 crore. Its online platform's monthly sale is estimated to have dropped from Rs 22 crore in July last year to Rs 17 crore when it opened its first offline store.

Urban Ladder's aggressive offline plans come as Swedish giant IKEA opened its first Indian store in Hyderabad last month. IKEA's first store has been touted as bad news for online retailers like Urban Ladder and rival, Pepperfry.

Not to be left behind, Pepperfry is also aggressively expanding offline now. In March this year, it raised Rs 250 crore to open outlets in smaller cities and towns.

(Edited by Anwesha Madhukalya)

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