The Sleep Company raises Rs 177 crore; aims to open 25-plus stores by March 2023

The Sleep Company, Asia's first SmartGRID-based mattress maker, has raised Rs 177 crore in its Series B funding round led by Premji Invest Opportunity Fund, Fireside Ventures and Alteria Capital. It is aiming to become a Rs 500-crore company over the next 2-3 years, and a Rs 1,000-crore company over the next 4-5 years.

The brand has recently forayed into offline retail, with three exclusive stores in Bengaluru, Hyderabad and Thane. It now plans to open more than 25 stores by March 2023, and 100 stores by March 2024 across top metro cities.

Harshil Salot, co-founder, The Sleep Company, shares, "We are going to deploy the Rs 177 crore we raised recently, across four major building blocks, i.e., omnichannel/retail expansion; international expansion; growing the D2C business; and strengthening the team to build a global business."

"We are operating in Japan, the UAE and UK, and we have seen great initial traction. We will increase our brand presence and share in these markets. We will continue to invest in our D2C channel in the online landscape, increase our brand penetration and improve market share. We also want to invest in a team which can make us the most iconic brand over the next few years."

The growth investments team at Premji Invest comments, “Our investment in The Sleep Company is a part of our broader thesis of India getting more online, premiumisation and increasing aspirational demand from Tier-I towns. As per capita income increases, we see higher demand across consumption categories. The company's product offering is fast emerging as a brand of choice."

"Based on our understanding of the consumer market and the fact that sleep is emerging to be an important category in the space of overall wellness, we did our first funding in The Sleep company last year. We are now seeing sleep tech emerge as a fast growing ecosystem, both in India as well as globally," says Dipanjan Basu, partner, Fireside Ventures.

The brand has been focussing on digital over last 2-3 years and has recently gone omnichannel. Highlighting the brand's ad spends, Priyanka Salot, co-founder, The Sleep Company, adds, "We have always spent 20-25% of our revenue on media spends. We have strong unit economics to acquire the customers. As of today, most of our money is spent on digital space because offline expansion is a very new phenomenon."

"Today, 90% of our sales come from digital and 10% from offline space. In digital, more than 50% of the sales come from our own website and D2C channel, and less than half comes from marketplaces like Amazon or Flipkart."

The brand has observed drastic change in the behaviour of consumers over the last two years. Salot says, "Due to COVID, consumer habits are changing drastically, and a lot of attention is given to sleep, health and wellness. Mattress is now becoming a health and wellness product. People are realising that a good mattress can really help you sleep better and healthier. Consumers today do research for 7-10 days before buying any product."

In FY22 the brand grew 400%, as compared to FY21, and for FY23, it aims to expand at 300%, as compared to FY22. Salot adds, "We will not just create an Indian brand, we will create a global 'Made in India' brand."