Pepperfry IPO: Why plans for online furniture retail public offering are on hold | Biz News

Pepperfry IPO: Pepperfry generates revenue primarily from commission on product sales. Pepperfry derives 60 percent of its sales from home decor and is increasing its focus on the category.

Pepperfry postpones IPO plans: Here’s why (Image source: X/ @Pepperfry/ depositphotos)

New Delhi: E-commerce startup Pepperfry has decided to delay its initial public offering (IPO) plans. Instead of an immediate IPO, the omni-channel furniture retailer will focus on driving growth and profitability in the current fiscal year. Founded in 2012, Pepperfry had been aiming to go public and raise $250-300 million in 2022.

“We have put our IPO plans on hold for now to prioritize other key areas of our business. Our financial position is solid, so we are focused on driving growth. We are targeting steady, profitable growth over the next 8-10 months to prepare for a potential IPO,” Pepperfry founder and CEO Ashish Shah said in an interview.

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Is Pepperfry profitable?

Pepperfry’s revenue for fiscal 2023 rose marginally to Rs 272.3 crore from Rs 247 crore in fiscal 2022. Shah attributed the growth to discretionary expense cuts. Pepperfry primarily earns from commissions from product sales. The company aims to deliver sequential monthly revenue growth for the full fiscal, targeting 10-15 per cent annual revenue growth, driven by strong real estate sales and consumer spending trends in India.

The company has significantly reduced cash expenditures and is looking to optimize studio operations, which has led to a 15 percent increase in business compared to the previous year.

What is the main selling factor of Pepperfry?

Pepperfry currently derives 60 percent of its sales from home décor and is increasing its focus on the category. To diversify its offerings, the company has launched multiple direct-to-consumer (D2C) brands and plans to introduce additional private labels. The company has started offering exhibition services for retail brands in its studios to increase revenue streams.

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Who are the major investors in Pepperfry?

Pepperfry’s major investors include:

• Norwest Investment Partners
• Goldman Sachs
• Pidilite’s Projects

Following the untimely death of Pepperfry co-founder Ambareesh Murty, Shah was promoted to CEO. The company faces competition from e-commerce giants such as:

• Amazon India
• Flipkart
• Urban Ladder, a Reliance Industries subsidiary