Sleepwell-Parent Makes Major Acquisitions: Gains Full Control of Kurlon and Secures 35% Stake in Furlenco
Sheela Foam, the parent company of Sleepwell, has recently entered into an agreement to acquire stakes in two companies. The first one is Furlenco, an online furniture retailer, and the second is Kurlon Enterprises, a mattress maker. The acquisition of stakes in both these companies was disclosed in a stock exchange filing by Sheela Foam.
This move signifies Sheela Foam’s foray into the fast-growing online furniture e-commerce business through its partnership with Furlenco. It also reflects the company’s interest in expanding its presence in the mattress industry by acquiring stakes in Kurlon Enterprises. The strategic investments are aimed at capitalizing on the potential growth opportunities in the furniture and mattress sectors, considering the increasing demand for such products in the market.
According to the proposal, Sleepwell intends to acquire approximately 35% stake in Furlenco, an online furniture retailer based in Bengaluru. The acquisition would be made for a cash consideration of Rs 300 crore, subject to customary working capital and other adjustments. Based on this deal, Furlenco would be valued at approximately Rs 857 crore, which translates to over $100 million.
By acquiring a significant stake in Furlenco, Sleepwell aims to tap into the growth potential of the rapidly expanding online furniture e-commerce business. This strategic move would allow Sleepwell to strengthen its presence in the furniture market and potentially leverage Furlenco’s expertise and market position in the online furniture retail space.
In addition to the acquisition of a stake in Furlenco, Sheela Foam also revealed its plans to acquire a majority stake of 94.66% in Kurlon Enterprises, the company that owns the Kurlon brand of mattresses. The acquisition of this majority stake will be made at a cost of Rs 2,035 crore.
Following the acquisition, Kurlon Enterprises is estimated to be valued at around Rs 2,150 crore, which is equivalent to approximately $260 million.
By acquiring a significant majority stake in Kurlon, Sheela Foam aims to strengthen its position in the mattress industry and expand its product portfolio. This strategic move allows Sheela Foam to capitalize on the growth potential of the mattress market and potentially enhance its market presence and brand offerings.
Furlenco, established six years ago, offers subscription-based services for furniture and home decor rentals, as well as relocation services. Beyond providing furniture and home appliances on rent, Furlenco has diversified its offerings to include the rental of two-wheelers, gaming consoles, entertainment systems, and fitness equipment. The company operates in major cities such as Bengaluru, Mumbai, and Delhi NCR, catering to a wide range of customers looking for flexible and convenient rental solutions for their home and lifestyle needs.
Furlenco has received significant financial backing from various investors, including Zinnia Global Fund, CE-Ventures, Lightbox Ventures, and actor Aamir Khan. In total, the company has raised approximately $240 million through a combination of equity and debt rounds. Notably, Furlenco secured $140 million in a Series D funding round in July 2021.
These substantial investments have provided Furlenco with the necessary capital to fuel its expansion and growth in the online furniture rental and home decor market. The financial support from these prominent investors indicates the confidence in Furlenco’s business model and its potential to thrive in the rapidly evolving e-commerce industry, particularly in the domain of subscription-based furniture and lifestyle services.
As per Furlenco’s unaudited financials, the company achieved revenue of Rs 152 crore during the fiscal year 2022-2023. In the previous fiscal year 2021-2022, Furlenco’s revenue from operations experienced a significant surge of 53.3%, reaching Rs 129 crore. However, during the same period, the company’s losses increased by 73% to Rs 151.5 crore.
These financial figures indicate that while Furlenco has been successful in generating higher revenues, it has also faced challenges in controlling its losses. As the company continues to expand its services and reach more customers, it remains focused on improving its financial performance and achieving profitability in the future. The growth in revenue shows promising potential for Furlenco in the furniture and home decor rental market, and the company may be working towards finding a balance between growth and sustainable financial operations.
With its recent investment in Furlenco, Sleepwell, the parent company of Sheela Foam, is positioning itself to enter the competitive market of online furniture rental and home decor services. By acquiring a stake in Furlenco, Sleepwell will now be competing with other new-age companies that offer similar subscription-based furniture and lifestyle rental services. Some of the key competitors in this space include Rentomojo, Rentickle, Cityfurnish, and Pepperfry, which have established their presence in the growing market of online furniture and home essentials rentals.
As Sleepwell ventures into this space through its association with Furlenco, it aims to tap into the increasing demand for flexible and hassle-free rental solutions for furniture and lifestyle products. By joining the competition with these well-established players, Sleepwell seeks to leverage Furlenco’s expertise and market position to expand its presence and offerings in the online furniture rental industry. The competition in this market is likely to drive innovation and better customer experiences as companies strive to cater to the evolving needs of consumers in this space.
