SoftBank-backed Lenskart raises $220 million as India's tech industry booms

India’s Lenskart, an online retailer for eyewear, raised $220 million from investors including Temasek Holdings Pte and Falcon Edge Capital, in another sign of booming interest in the country’s technology startups.

Founded by Peyush Bansal in 2010, the company sells eyeglasses, contact lenses and sunglasses online and through about 750 retail outlets in the country. It plans to use the capital, along with $95 million raised earlier this year from KKR & Co., to expand online sales and add brick-and-mortar stores in India, as well as in Southeast Asia and the Middle East.

“Every vertical from apparel to footwear, aside from eyewear, has been disrupted globally,” said Bansal, 37, on a video call announcing the funding. “We can easily spend two decades solving the problem of awareness, penetration and affordability in eyewear.”

The startup’s valuation is now $2.5 billion, the founder said.

Bansal graduated from Montreal’s McGill University and then worked at Microsoft Corp. in the U.S., before returning to India about a decade-and-a-half ago to become an entrepreneur. He set up Lenskart Solutions Pvt, as the company is officially known, in the dusty, industrial town of Faridabad outside New Delhi and won early backing from Japan’s SoftBank Group Corp.

Lenskart sold about 8 million pairs of eyewear last year and is aiming to grow that by 30 per cent in the year ending March 2022. The company claims to be the largest eyewear seller in India and seeks to become the leader in the new geographies of Southeast Asia and the Middle East. The combined market opportunity is projected to be more than $15 billion by 2025, the startup said in an announcement on Monday.

India’s tech industry is having a breakout year. Global investors are pouring billions of dollars into the country’s startups, minting more unicorns than ever before.

Those investments are starting to pay off. Food-delivery app Zomato Ltd. became the nation’s first unicorn to make its stock-market debut, raising $1.3 billion. The digital payments startup Paytm filed a draft prospectus for what could be the country’s biggest IPO ever.

Bansal began his entrepreneurial efforts with a startup aimed at solving the housing problems of college students. But he quickly realized he could make more of an impact in selling eyewear.

“India is the blind capital of the world and about half of its 1.3 billion people need glasses,” he said.

He said Lenskart is now profitable, despite ups and downs during the Covid-19 lockdowns.

“We turned profitable at the company level before the pandemic, were in the red during the peak of the first and second waves and have returned to green again,” he said.

The startup plans to make investments in its supply chain and new technologies. A new manufacturing plant in Rajasthan in western India is said by the company to be the largest factory in the world for ready prescription glasses, making 150,000 pairs a day. The company recently set up the Lenskart Vision Fund to invest $2 million each in select startups working in eyewear, eye-care and related retail segments.

Its digital offerings include a virtual 3D tool for trying on glasses, as well as artificial intelligence face-mapping to help with frame recommendations.

“Technology offers huge benefits to the whole eyewear industry,” Bansal said.