HomeLane Acquires DesignCafe, Raises INR 225 Cr Funding From Hero Enterprise, Others
by Gargi Sarkar · Inc42SUMMARY
- Post the acquisition, DesignCafe will continue to operate as an independent brand
- HomeLane also raised INR 225 Cr (around $27 Mn) from Hero Enterprise and its existing investors
- The fresh capital will be used to accelerate growth and invest in brand building and technology
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Home interior solutions startup HomeLane’s parent company, Homevista Decor & Furnishings Private Limited, has acquired its smaller rival DesignCafe in a share-swap transaction.
Post the acquisition, DesignCafe will continue to operate as an independent brand. HomeLane and DesignCafe will cater to different segments of the market, HomeLane cofounder Srikanth Iyer told Inc42.
The combined entity is expected to achieve a revenue of INR 1,000 Cr in FY25, up 33% from INR 761 Cr in FY24, and turn EBITDA profitable, Iyer said.
Besides the acquisition, HomeLane also raised INR 225 Cr (around $27 Mn) from Hero Enterprise and its existing investors. However, the startup did not disclose the names of the existing investors who participated in the funding round.
A part of the fresh capital will be used to accelerate growth and achieve about 30% year-on-year growth for the next few years.
“Secondly, funds will be used for brand building. The existing brands, including DesignCafe and HomeLane, among others, will continue to coexist and thrive, requiring resources to strengthen their individual identities,” Iyer said.
Lastly, investments will be made in technology. DesignCafe and HomeLane have developed significant technological advancements, and the funds will be used to pursue further advancements, especially in AI, to provide more value to customers, he added.
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Founded in 2014 by Iyer, Rama Harinath, and Vivek Parasuram, HomeLane offers personalised tech-enabled end-to-end interior services.
Last year, HomeLane closed a bridge round of INR 75 Cr (about $9.1 Mn). It is backed by the likes of Evolvence, NuVentures, Sequoia Capital, Accel, JSW Ventures, Mohandas Pai, and MS Dhoni.
On the other hand, DesignCafe was founded in 2016 by Gita Ramanan and Shezaan Bhojani with the vision of making innovative home interior solutions affordable.
HomeLane and DesignCafe are currently present in 30 cities with a total of 82 stores.
HomeLane gets a majority of revenue from cities like Bengaluru, Chennai, and Hyderabad. Tier II cities such as Ahmedabad, Bhubaneswar, Ranchi, and Surat account for about 20% of the revenue and are seeing “phenomenal growth”, HomeLane cofounder and COO Tanuj Choudhry said.
HomeLane competes with startups like LivSpace, Urban Company, NoBroker, among others.
“In terms of competition, while there are many players in the market, we believe there’s ample room for all of us. Together, we occupy only 5% of the home interiors market, and it’s not a winner takes all scenario. Our key differentiator at HomeLane has always been our ability to deliver predictably—on time, within budget, and with great design aesthetics,” Iyer said.
According to him, the startup’s main competition, however, is not with other brands but with the unorganised sector. A significant portion of customers still turn to local carpenters. The startup wants to close this gap by delivering a high-quality, affordable products that meet the needs of every customer segment.