Online furniture retailer Urban Ladder is eyeing to secure funds amounting to $35-40 million. The company’s future growth seems to lie in traditional brick-and-mortar stores.
After securing a single-brand-retail trade licence the previous year, Urban Ladder set up six large-format stores in Bengaluru and Delhi-NCR that now account for more than one-third of its total revenue.
“We spent the last year testing our offline model,” said chief executive Ashish Goel. “Now that we know it works, we are going to start expanding our offline stores aggressively.”
The basic purpose of the company against raising these funds would be to expand its offline presence, adding stores in Mumbai, Chennai and Pune by January.
Goel wants the company to be operationally profitable (at the Ebitda level) by the first quarter of fiscal year 2019-20. “We are getting into the zone of single-digit negative Ebitda and we are 7-8 months away from Ebitda zero,” Goel said.
The furniture retailer’s earnings before interest, taxes, depreciation and amortization (Ebitda) improved 70% over the past 12 months, crediting the single-brand-retail licence. And this, contributed significantly to the company’s growth.
Talking about the single brand license, it allows the company to procure products directly from manufacturers and stock and sell these directly to consumers. Along with this, Urban Ladder also designs products that it outsources for manufacturing.
According to the reports, Urban Ladder earns Rs 7 crore in monthly sales from its Bengaluru stores. The company fights a tough competition with players like Ikea and Pepperfry among others.