Is Premji Invest’s Potential Rs 200 Crore Investment in Wooden Street a Game Changer for the Omnicahnnel Furniture Industry?

Wooden Street, a leading omnichannel furniture company, is on the verge of securing approximately Rs 200 crore (around $25 million) from Premji Invest, as reported by sources familiar with the matter to Moneycontrol. This Series C funding round values Wooden Street at Rs 1,500-1,600 crore ($180-200 million).

The investment comes at a pivotal time as the omnichannel approach, blending physical stores with digital platforms, becomes increasingly crucial for investors in the consumer market. Venture capital funds are now encouraging digital-only startups to establish offline channels once they reach a certain scale, aiming to diversify revenue streams and expand their customer base.

Based in Rajasthan, Wooden Street specializes in home décor and customized furniture, boasting over 100 stores across India and launching approximately 10 new stores each month to enhance its omnichannel strategy. Including online channels, the company currently operates over 350 delivery points and plans to further expand these touchpoints. In April, Wooden Street announced an investment of Rs 50-70 crore to build a manufacturing facility in Jodhpur, Rajasthan. This 10-lakh square feet plant increased its production capacity to 4-5 lakh units per annum. With the latest funding, Wooden Street aims to further boost its output, focusing primarily on business expansion.

Neither Wooden Street nor Premji Invest responded to Moneycontrol’s queries by the time of publication.

Wooden Street has also demonstrated financial prudence. In FY23, the company, founded by Lokendra Ranawat, Virendra Singh Ranawat, Dinesh Pratap Singh, and Vikas Baheti, reported a revenue of Rs 194 crore and a profit of Rs 1 crore. Despite a 48% increase in topline revenue, profits slightly declined from Rs 1.2 crore in FY22.

Previously, Wooden Street raised $30 million in a funding round led by WestBridge Capital in 2022. The company competes with Swedish giant IKEA, Peak XV-backed Wakefit, Furlenco, Pepperfry, Urban Ladder, and other furniture makers. These companies, like many others in the consumer sector, are increasingly focusing on omnichannel strategies in India by expanding their network of physical stores. Even IKEA, traditionally an offline-heavy business, is increasing its online sales efforts to reach beyond top Indian cities.

A growing number of brands are adopting a mix of online and physical channels due to higher customer spending. An omnichannel shopper spends 2.5 times more than a single-channel shopper, according to a recent report by Redseer, Accel, and Fireside Ventures. The report also emphasized that digital will significantly influence offline purchases,underscoring the importance of an omnichannel approach.