Bengaluru-based omni-channel furniture retailer Urban Ladder, after a gap of 20 months has managed to raise USD 2 million from existing investors including SAIF Partners, Sequoia Capital, and Steadview Capital, according to regulatory filings, which also reveal that the triad of aforementioned investors each contributed nearly USD 0.7 million.
Urban Ladder has transitioned towards a lesser cost price model to compete with the two-giant e-tailers in India, Walmart-owned Flipkart and Amazon who have set foot into the online furniture territory. Also, the competition here has heated up with the entry of major Swedish furniture brand IKEA in India. So far, Urban Ladder did not play around with deep discounting, but now it is forced to do. High cost services like cash on delivery has been done away with, and it has shut down operations in unprofitable cities like Chandigarh and Guwahati which incurred higher supply chain costs.
The 2012 founded furniture retailer is also reeling with a series of high-profile resignations. While its co-founder Rajiv Srivatsa resigned last month, Vani Kola, managing director of Kalaari Capital which had invested in Urban Ladder, stepped down as its board-member in August this year.
Pradeep James, director of design and visual merchandising at Urban ladder, also put in his papers. In March this year, Ajit Joshi, president and chief operating officer, Urban Ladder quit citing personal reasons. Prior to these exits of the strategic leadership, top executives in-charge of operations and supply chain, sales and marketing, product and engineering, and HR have also left office.
These details were sourced from RoC filings accessed by business intelligence platform paper.vc. Kalaari Capital did not participate in the latest fresh funding into Urban Ladder.
All these developments come in the backdrop where the startup is managing the show with a lean workforce, as it fired 40% of its staff in the Jan-March quarter this year, to cut costs.
Meanwhile, Urban Ladder has said that it has turned profitable for the first time at the EBITDA (earnings before interest, tax, depreciation and amortization) level in July though the volumes have dipped sharply on account of lesser spend on marketing and promotion.
“We hit our first profitable months in June and July 2019, coincidentally timing with our seventh-anniversary celebrations. We reduced cash burn from USD 0.6 million plus in March 2019, to positive USD 42,293 in June 2019. We hope to continue to generate profits for 7-8 months of this year to even out losses incurred for the first two months (April & May) of this fiscal and are targeting IPO by March 2021,” Srivatsa, told local newspaper BusinessLine, a day after he quit the company.
The battle-weary Urban Ladder has not yet discontinued opening brick-and-mortar stores. It recently opened a 4000 square feet store in September 2019 in Pune. The chain has a dozen stores across cities like Chennai, Bengaluru, and Delhi. Four more franchisee stores are expected to come up in Hyderabad, Coimbatore, Kolkata, and Mumbai by March 2020.
The Indian furniture market is worth USD 17 billion of which 90% is in the unorganized sector.