Wakefit FY24 Revenue Rises 25%, Losses Down 90%

Wakefit, a direct-to-consumer home and sleep solutions company based in Bengaluru, reported a 24 per cent revenue increase to Rs 1,017 crore in FY24, according to co-founder Chaitanya Ramalingegowda. 

The startup also significantly reduced its losses by 90 percent, bringing its net loss down to Rs 15 crore, thanks to improved cost management and better factory utilization, which enhanced profit margins, as per the media report.

This financial improvement comes amid a shift in investor expectations, urging companies to focus on profitability rather than relying heavily on external funding. Ramalingegowda expressed that while their investors are pleased with the year-on-year performance, the founders believe they can achieve even more than the 25 per cent growth seen this year, which translates to an additional Rs 250 crore in business.

Looking ahead, Ramalingegowda anticipates a further 30 per cent revenue increase in FY25, estimating total revenue between Rs 1,320 and Rs 1,400 crore, supported by rising discretionary spending as consumer confidence grows post-Covid. Although the company is targeting growth, it plans to maintain a frugal approach.

Founded in 2015, Wakefit was earnings before interest, taxes, depreciation, and amortisation (EBITDA) profitable until 2019 but shifted its focus to growth at that time. In FY24, however, it returned to profitability with an EBITDA of Rs 65 crore. The company generates around 30-35 per cent of its sales through e-commerce platforms like Flipkart and Amazon, with the remainder coming from its physical stores and website. Currently, Wakefit operates over 80 stores and plans to expand further.

Ramalingegowda noted that most of the USD 40 million raised in 2023 is still in the bank, indicating that capital is not a concern. Recently, Elevation Capital participated in a USD 10-12 million investment round, acquiring shares from the ESOP pool and joining the company's cap table. To date, Wakefit has secured about USD 150 million in funding from prominent investors, including PeakXV (formerly Sequoia Capital India), Verlinvest, SIG, Investcorp, and Elevation Capital.