Livspace, home interiors and renovation platform, on Monday said it has formed a joint venture (JV) with Alsulaiman Group (ASG) to expand into the Middle East region.
With its maiden joint venture with ASG - Ikea's operating partner in the region, Livspace will aim to capitalize on the vast opportunities in the home interiors and renovation segment in the Kingdom of Saudi Arabia (KSA).
''We will be operating as Livspace in the region, in partnership with ASG. It's a 50:50 partnership wherein both Livspace and ASG have invested about $50 million.
''We are launching in KSA initially and will be looking to capitalize on the massive opportunity in the home interiors and renovation segment in the Middle East and North Africa (MENA) region in the next 24 months,'' Livspace founder and CEO Anuj Srivastava told PTI.
The JV will be fully operational by the first half of 2022, he added.
Livspace - which has raised funds from Kharis Capital, Bessemer Ventures, and others - brings homeowners, design professionals, vendors, and brands together on a single tech-led platform.
Srivastava said Saudi Arabia's booming real estate market, especially the residential segment, presents significant opportunities.
''It is estimated to be a $15 billion market opportunity. Saudi Arabia's Vision 2030 initiatives are sparking growth in homeownership and a wider array of residential formats - villas to high-rise apartment living – which underlines the need for quality home interior design and execution,'' he explained.
Aligned with this, Livspace is expanding its operations in the region to bring trusted home interiors and renovation solutions to homeowners, enable thousands of small and fragmented design and home improvement professionals to grow their business and create the largest, most organized digital supply chain for the home interiors and renovation industry in the region.
''Livspace follows an omnichannel model and we will have similar operations in the Middle East. Yes, we will be setting up experience centers in the region and they will be operational in early 2022... Considering the market potential, we are looking at approximately 10 percent contribution from the region in the next 24 months,'' he said.
Both Livspace and ASG have invested about $50 million to fuel regional growth, and the JV further plans on strengthening the team by investing in top talent across levels while also aiming to reach 500 design and execution partners in the region by 2022.
Alsulaiman Group CEO Saud Alsulaiman said the partnership with Livspace will allow the company to expand the scope of the customer experience from the beginning of the design of the home to the end of implementation in an innovative and unique experience.
Talking about the overall business, Srivastava said the company is headquartered out of Singapore with operations in India.
''The former currently contributes 20 percent to the overall business and early this year our India operations turned profitable. We are also looking to expand across 80 new cities globally starting with the APAC geography, including Australia, over the next 18-24 months along with the MENA region,'' he added.
On the India business, he said the company has built margins through modular solutions, contracting services and significantly improved its operational efficiencies since FY20, resulting in India operations being profitable and starting to generate positive cash flows.
''We have grown over 80 percent compared to pre-COVID19 levels and in the next 12 months, we will double our business, close new orders worth over Rs 5,000 crore and achieve a gross revenue of over Rs 2,800 crore. We will also be present in 60-65 new cities in the next year,'' Srivastava added.
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