Private equity firm ChrysCapital has invested $100 million in eyewear brand Lenskart via primary and secondary share purchases, bring the company’s total capital infusion to $850 million in the past year. The fresh investment comes nearly 3 months after the ecommerce portal for eyewear in India raised $500 million from a wholly-owned subsidiary of Abu Dhabi Investment Authority (ADIA), for a 10 percent stake.

Share Market Live

NSE

This marked one of the largest funding rounds in the recent past, at its existing valuation of $4.5 billion. This also resulted in ADIA becoming one of the largest shareholders in Lenskart.

On March 23, fair-trade regulator Competition Commission of India (CCI) said it has given approval under the green channel route to Abu Dhabi Investment Authority for acquiring a stake in Lenskart.

The company is backed by KKR & Co, SoftBank, Temasek and PremjiInvest, among others. Kedaara Capital has an about 9 percent stake in Lenskart, while SoftBank and Premji Invest own nearly 19 percent and 10.4 percent, respectively. Lenskart has concluded secondary share sales for partial exits to investors like Chiratae Ventures and others in the past few years.

ChrysCapital said that the investment will support Lenskart's growth plans and strengthen its position as a global eyewear leader. Avendus Capital acted as the exclusive financial advisor to Lenskart and its shareholders. For this transaction, Shardul Amarchand Mangaldas and Allen & Overy served as the legal counsel for ChrysCapital and EY as the financial and tax advisor, a statement said.

“With the acquisition of Owndays, there is an opportunity for Lenskart to expand across 10+ Asian countries in addition to the already large Indian market. This investment aligns with ChrysCapital’s strategy of backing founders that are category creators and who leverage technology to offer an outstanding customer experience,” said Rajiv Batra, Senior Vice President, ChrysCapital Advisors.

Lenskart, which uses technology and supply chain automation to directly sell glasses and contact lenses to close to 20 million consumers, agreed in June 2022 to buy a majority stake in Japan’s Owndays, at a valuation of about $400 million, Bloomberg reported.

With the fresh capital, Lenskart wants to continue deepening its penetration in India while scaling its international presence in Asia and the Middle East. The company now has 2,000+ stores — 1,500 in India with the rest across Southeast Asia & the Middle East. The Peyush Bansal-founded company is also set to ramp up its soon-to-be-launched factory, which can manufacture 20 million pairs of eyewear annually. Shipping could begin next year.

“We believe that with the help of technology, customer centricity, and big investments in supply chain and talent, we can eradicate the problem of vision correction. Eyewear as a lifestyle category is at a very early stage in its evolution, and there is a lot of opportunity to make glasses that can uplift our quality of life significantly as seen in shoes, apparel, and watches. And hence it is still Day 1 at Lenskart in our journey of transforming the way people see and experience the world,” said Peyush Bansal, Founder and CEO, Lenskart.

In FY22, Lenskart saw a strong revenue growth of 66 percent to ~ Rs 1,500 crore but slipped into losses. The ~ Rs 100 crore loss came after posting a profit of ~Rs 30 crore in FY21. In FY23, Lenskart says it grew revenue by 60 percent for the second year in a row and is now profitable.

This could place Lenskart among the handful of unicorns, or startups with a valuation of $1 billion or more, that are profitable. Of the 56 unicorns, who reported their FY22 earnings, only six displayed profitability — a criterion that has risen in importance during the funding winter, as public markets hammered loss-making tech listings, forcing private market investors to pivot from “growth at all costs” to “sustainable unit economics”.

The funding for Lenskart comes at a time when deal flow activity has slowed significantly in the Indian startup market, especially for late-stage startups. As per a report by Bain and Company, the number of $100 million or higher rounds fell 50 percent in India last year to just 48 — and the vast majority of them were closed in the first half of 2022 said in a report.

First Published:Jun 15, 2023 1:12 PM IST