Suspense crime, Digital Desk : Wakefit, the popular online brand that started by selling mattresses in a box and has since expanded into a full-range furniture and home goods company, is taking a major step towards becoming a publicly traded company. The Bengaluru-based startup has officially filed its initial paperwork with the Securities and Exchange Board of India (SEBI) for an Initial Public Offering (IPO).

This move signals Wakefit’s ambition to tap into the public market to fuel its next phase of growth.

Breaking Down the IPO Plan

An IPO is composed of two main parts, and Wakefit’s plan includes both:

1. Fresh Issue of Shares: The company aims to raise ₹160 crore (approximately $19 million) by issuing new shares. This is fresh capital that will go directly into the company’s bank account. Wakefit has stated it will use this money primarily for opening new brick-and-mortar stores, funding its inventory, and general business expansion.
2. Offer for Sale (OFS): In addition to the new shares, existing shareholders plan to sell up to 9.84 million of their own shares. This part of the deal allows early backers to cash in on their investment. The sellers include the company’s founders, Chaitanya Ramalingegowda and Ankit Garg, as well as major institutional investors like Peak XV Partners (formerly Sequoia Capital India) and Verlinvest S.A.

It’s worth noting that Wakefit has revised its IPO plans. An earlier draft had proposed raising a much larger sum, but the company has now scaled back the size of the fresh issue to ₹160 crore, signaling a more cautious approach to its market debut.

The Wakefit Story: From Sleep to Complete Home Solutions

Founded in 2016, Wakefit quickly became a household name in the direct-to-consumer (D2C) space by revolutionizing the mattress industry in India. By selling directly to customers online, it cut out middlemen and offered competitive pricing.

Since then, the company has successfully transitioned from a “sleep solutions” provider to a “home solutions” brand, now offering everything from sofas and beds to dining tables and home decor. While primarily an online player, Wakefit has also been aggressively expanding its offline presence with physical retail stores across the country.

Financially, the company has shown strong growth, with its revenue climbing to ₹813 crore in the 2023 fiscal year. However, like many fast-growing startups, it is still in an investment phase and reported a loss of ₹146 crore for the same period as it focuses on expansion.

What’s Next?

Filing the draft papers (known as a DRHP) is the first formal step. SEBI will now review the proposal. Once it receives the green light, Wakefit will decide on the IPO’s final pricing and timeline before opening it up to the public for investment. The IPO is being managed by leading investment banks Kotak Mahindra Capital Company and ICICI Securities.

Read More: Beyond the Pitch: Virat Kohli Backs New Sportswear Giant Agilitas Sports in Major Deal