Livspace seeks to design interiors for one in 10 homes in metros by 2022

Before moving to their newly purchased apartment at Brigade Cosmopolis in Bengaluru, Abhijit Kaisare and his wife Tanushree Pandit considered many vendors for designing the interiors, but they remained unimpressed. On the other hand, carpenters couldn't visualise the decor.

All the couple wanted was a one-stop shop for their interior needs, and to work with someone who understood their taste and preferences. Their search eventually ended with Livspace and their meeting with interior designer Aditi Badaya.

Bengaluru-headquartered Livspace, a home interiors and renovation platform, was founded in July 2014 by Anuj Srivastava and Ramakant Sharma and the start-up began its operations in 2015.

The company has recently raised $70 million in Series C funding. The round was led by TPG Growth and Goldman Sachs. Existing investors Jungle Ventures, Bessemer Venture Partners and Helion Ventures also participated in the round. 

The company, so far, has raised $103.6 million from marquee investors.

“Livspace is an innovative and fast-growing Indian B2C internet company. We feel the company’s platform approach, which integrates products and services while leveraging technology to provide customised consumer solutions, has allowed it to become a leading brand in the home improvement ecosystem,” said Niladri Mukhopadhyay, a managing director at Goldman Sachs.

Product concept

The home interiors and renovation market in India has not been capitalised upon yet. Home design and furnishing are largely serviced by mom-and-pop shops, local contractors and carpenters. Traditionally, a homeowner would need to meet several service providers, vendors and brands for designing his/her home. Even then, the market and services remain unreliable, susceptible to cost overruns and delays.

Livspace delivers end-to-end home interiors to homeowners in a hassle-free manner and empowers designers and vendors to deliver it. The start-up operates as a three-side marketplace between homeowners, designers and vendors, supporting it through Canvas, its proprietary technology platform.  

“Ours is India’s first end-to-end, online home design experience that disrupts the traditional, fragmented model, making the entire process predictable, efficient, and enjoyable,” said co-founder Srivastava.

Opportunity

While the market size a trillion-dollar globally, the home interiors and renovation market will likely top $23 billion by 2022 in India. 

The company feels its major competitors are offline contractors and carpenters and mom-and-pop shops.

In an industry that has traditionally struggled with scale, Livspace claimed to have created a first-of-its-kind, design-to-installation technology platform and a marketplace model that is highly scalable.

So far, Livspace has designed over 2 million sq ft residential space and plans to design interiors for one in every 10 homes in Indian metros by 2022.

Livspace’s has about 2,500 certified designers and hosts a community of more than 400 suppliers across India. It has standardised a catalogue of more than four million SKUs (stock keeping units).

“From the time a consumer places the order, Livespace takes about four to six weeks for a simple kitchen and about 12 to 16 weeks for a complex renovation,” the co-founder said.

Revenue model

Livspace's revenue model is similar to any e-Commerce brand — it makes profits by selling products and services. On the Livspace catalogue, approximately 60 per cent of the products and services are Livspace private-labelled or white-labelled. The remaining 40 per cent is a curated brand and vendor marketplace. 

“Our blended gross margins are at 38-40 per cent," according to the company.

In the last 18 months, Livspace’s gross revenue has more than quadrupled. “We are on track to hit over $125-135 million in annualised gross revenue by March 2019,” said Srivastava.

More than 85 per cent of the company's business comes from the mobile platform and the balance from the desktop. Livspace has achieved unit-economics profitability across its all previously launched markets — Bengaluru, Delhi-NCR and Mumbai.

Livspace currently serves seven cities in India — Bengaluru, Delhi, Gurugram, Hyderabad, Mumbai, Noida, and Thane. The company has a network of four Design Centers, the start-up's experimental stores, and 15 experience apartments all over the country.

“We plan to take the number of metro areas that the company is serving to 13-14 in the next six to nine months. The number of Design Centers and experience apartments will also jump to around 40 in 2019,” he added.

Livspace plans using the fresh funds to expand its operations to six more metro areas by 2019 while achieving a deeper penetration in the existing markets. To fuel its expansion efforts, the firm plans to grow its offline footprint through Livspace Design Centers.

 

           

Expert Take: Identify target customer
 

Srikanth Iyer CEO & co-founder, Homelane

Livspace has been able to scale at incredible speed and that’s because it identified customer pain points accurately and addressed those.
The home decor business is one where getting the order is far easier than executing it: The reason — the process of customisation and delivery is complex and ridden with many potential points of failure.
Livspace, I believe, needs to be clear on which target segment it is catering for, as the needs of a high-end customer and a mid-range customer are very different. Else, it is in danger of not being able to cater for any segment completely.
Given that it has raised a large amount, it needs to focus on segments and products it feels will scale faster. This will take Livspace to the next level of growth.