Lenskart is holding talks with SoftBank Vision Fund to secure $350 million in new funding, which is possibly to value the eyewear retailer firm at Rs 8,970 crore ($1.3 billion), according to the sources.
The Delhi-based firm’s previous valuation was worth around $470 million and the current figure is a massive gain against the previous valuation.
“Their (SoftBank and Lenskart) talks have been on for a few months and a deal is likely soon. SoftBank wanted to pump a bigger amount for Lenskart to aggressively expand outside of India but the company did not agree to it,” said an anonymously important source.
Recently, Lenskart ventured into the Singapore market and has plans to open 50-60 stores over the next three years in the island-city, before expanding to markets such as the Philippines, Taiwan and the Middle East, as reported by the Economic Times.
“Its rapid offline rollout has helped in brand building,” said an investor. “But a large part of its customer acquisition is still online, which is expensive. These costs will take time to reduce as the brand gets built through offline expansion.”
Lenskart’s strategy to scale up manufacturing and bring the activity under its fold has allowed the company to double its production cycle, ensure faster inventory turnarounds and offer a greater array of products through entering new product categories.
It has also helped the company control pricing of products, critical in an underserved and fragmented market that’s dominated by offline players.
Lenskart has chalked out ambitious expansion plans — it wants to add 150 stores by March 2020 and open 2,000 in India over the next five years. The company, which describes itself as the Amazon of eyewear, is spending big on its technology stack, particularly artificial intelligence and machine learning capabilities.
The company’s tech investment is currently about Rs 200 crore annually, which it expects to double over the course of the current fiscal year.