Pepperfry raises ₹250 crore from State Street Global

NEW DELHI: Online furniture retailer Pepperfry said it has raised ₹250 crore in a fresh round from Us-based investor State Street Global Advisors to consolidate its lead in furniture retail, by expanding its offline presence and logistics network.

Pepperfry chief executive Ambareesh Murty said in an interview that the company will use the funds to expand its supply chain, invest in technology and open new stores. Murty declined to comment on the company’s valuation.

The entry of a new investor into Pepperfry comes as a validation for the retailer, especially in a market where few e-commerce companies have been able to attract new investors.

Peppery raised its previous round from existing investors in 2016. Its nearest rival, Urban Ladder, announced a $12-million (₹77 crore) round last week from Kalaari Capital, SAIF Partners and other existing investors.

State Street Global Advisors (SSGA) is the asset management arm of State Street Corporation, a New York Stock Exchangelisted investment management firm with $2.8 lakh crore in assets under management.

“India’s large furniture and décor market is ripe for disruption and we believe that Pepperfry’s unique strategy, proven execution capabilities and passionate team are the perfect ingredients for success,” said Anandh Hari, managing director for private equity at SSGA.

As part of the deal, Hari will join the company’s board of directors. “SSGA is a very good fit for us for two reasons. One, because of their extensive financial markets expertise they will be very helpful to us when we go public. Also, they are patient, long-term investors,” Murty said. With ₹1,200 crore raised to date from the likes of Norwest Venture Partners, Bertelsmann India Investments, Zodius Capital and Goldman Sachs, Pepperfry is the best funded player in the online furniture and home furnishings category.

The investment suggests investors’ confidence in Pepperfry, a horizontal marketplace, at a time when Amazon and Flipkart are taking the lead in almost all major retail categories, putting pressure on single category retailers.

To survive in a highly competitive market, specialty e-commerce ventures are innovating by opening offline stores in order to boost sales growth, as Mint reported in November.

Pepperfry said it will use the funds to expand its network of experience centres, currently numbering 25 across cities, to tier II locations, most of which will happen through the franchise route.