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Pepperfry Eyes Profitability This Year, Ipo Next Year

Online furniture company, Pepperfry, said that itis on course to become a profitable entity in this calendar year and will look forward to launch its IPO in the next 14-15 months.

“Our business is growing like a rocket ship. We are growing today faster than we were growing last year. We are making margins higher than last year.

The way things are going we may move very close to profitability during the year,” said Ambareesh Murty, founder, and CEO atPepperfry.

According to Murty, since the company is moving towards becoming profitable, this is the right time for them to launch the IPO as well. “We are planning to go for an IPO in around 14-15months. I think the first milestone to go for an IPO is profitability. And since we are close to profitability it makes sense,” said Murty.

The company has been in conversation with its board for about three months now for the IPO. “We had discussions with representatives from multiple investment banks, legal firms and audit firms few days ago to understand what all we need to to do as we approach the IPO,”said Murty.

Pepperfry which aims to deliver more than 1.5 million products this year, is also looking to become a billion-dollar company in the next 12 months. The company is betting big on its supply chain, franchise outlets, and private label brands to achieve the coveted number. At present more than 50 percent of the company’s revenue comes from the private brands which are a high-margin category for the retailer.

“In the last 4 years, we have done some key things. We realised that customers in India need choice and there were not many available. So in order to meet the demand, we introduced our private label brands and that helped us to increase the offerings substantially. We built our supply chain which not only caters to the top cities but our 22 fulfillment centres which gives us the ability to reach out to customers in the 500 towns and cities. We also embraced the omnichannel concept four years back,” said Murty.

In the last one and half years, Pepperfry also started to roll out franchisee programs also. “So, supply chain, omnichannel and private brands all put together is helping us near the one billion revenue mark,” the top executive said.

The furniture retail company which has raised around $194 million in funding till now has recently opened a 3,60,000 sq.ft. automated warehouse in Hoskote in the outskirts of Bengaluru to add to its logistics and delivery firepower and cater to the increasing demand from the southern states of the country. The company now has 3 big warehouses with the other two beingin Delhi/NCR and Mumbai.

Pepperfry has invested $2 million on this Built-To-Suit facility which the company has leased for 5 years is capable of processing 1,000 orders per day. Murty also dismissed the suggestion of economic downturn and said the company is looking for a bumper festive sale.

According to him, the company generates 60 percent of its revenue from October-March period. The company will also focus on the existing 500 cities and towns it is catering to and will expand its business in the said geographies.

Founded in January 2012, Pepperfry is backed by Goldman Sachs, Bertelsmann India Investments, Zodius Capital, State Street Global Advisors and Norwest Venture Partners.


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