India's booming unicorn club may get a new entrant soon, if eyewear retailer Lenskart manages to land the investment deal being hashed out with SoftBank Group Corp, the world's largest technology investor. People in the know told The Economic Times, that the company is in talks with SoftBank Vision Fund to secure $350 million in fresh funding, and a deal is likely soon. That's close to three times the amount of funds that Lenskart has managed to raise since it was founded, as per Crunchbase data. What's more, the transaction is likely to value the startup at $1.3 billion.
"SoftBank wanted to pump a bigger amount for Lenskart to aggressively expand outside of India but the company did not agree to it," said a source. But even at the lower deal size, the jump in Lenskart's valuation will be over 176% to $1.3 billion, against its previous valuation of $460-470 million last August. That's when TR Capital and Hong Kong-based hedge fund Steadview Capital reportedly pumped in around $70-75 million a large secondary deal in the Delhi-based startup while Epiq Capital came in as a new investor.
In addition, Lenskart's existing investor lineup includes Unilazer Ventures, TPG Growth, the World Bank private investment arm International Finance Corp, Chiratae Ventures, Adveq Management, PremjiInvest and Unilazer Ventures' founder Ronnie Screwvala.
SoftBank's discussions come on the back of Carlyle Group's interest in Lenskart - which started as an online player but moved offline, too, in 2014 - but sources said those talks fell through as the private equity firm was proposing a valuation of about $700 million, much lower than the company's expectations.
Although Lenskart has not announced its latest financial results yet, it's FY19 revenue is expected to be pegged at Rs 500 crore in the last fiscal, with around Rs 70 crore in losses. In comparison, in FY18 it had reported total revenue of close to Rs 311 crore and a loss of Rs 262.87 in the previous fiscal, as per documents filed with the Registrar of Companies.
"Its rapid offline rollout has helped in brand building," an investor told the daily. "But a large part of its customer acquisition is still online, which is expensive. These costs will take time to reduce as the brand gets built through offline expansion."
Nonetheless, the company has chalked out ambitious expansion plans - it reportedly wants to add 150 stores by March 2020 and open 2,000 in India over the next five years. Given that industry estimates believe that only 25% of the country's population have access to eye care, there's certainly ample room for growth. Lenskart also forayed into Singapore recently and the plan is to open 50-60 stores there over the next three years before expanding to markets such as the Philippines, Taiwan and the Middle East.
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