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PE firm ChrysCapital plans to invest $100 million in Lenskart

Private equity fund ChrysCapital is in talks to invest around $100 million (Rs 828 crore) in omni-channel eyewear retailer Lenskart, people aware of the matter said.

To be sure, talks on picking up a stake are ongoing, and the investment has yet to close, the people added. If finalised, this would be among the largest investments in a new-age entity by ChrysCapital, which has backed internet firms such as Dream11, FirstCry, and Xpressbees.

If the PE firm joins the financing round, it would take the total ongoing funding round at Lenskart to around $500 million, where early investors like SoftBank Vision, Kedaara Capital, TR Capital and others are clocking a partial exit.
Existing backer Alpha Wave Global, formerly Falcon Edge, may also take part in the current financing by purchasing more shares, one person in the know said.

Secondary share sale

The ongoing round is largely a secondary share sale where stocks will change hands from existing to new investors and the money won’t go into the company’s coffers. The round may have a small primary capital infusion, sources said. The investment is taking place at a valuation of $4 billion.

ET reported on December 12 that Abu Dhabi Investment Authority (ADIA) is in advanced discussions with Lenskart and its existing shareholders to invest $350-400 million in the New Delhi-based firm.

“ChrysCapital has held talks to join the round now which will increase the total round size significantly,” one person who is aware of the matter said.

Lenskart was last valued at $4.5 billion after closing a $200 million primary funding round in July last year, ET has reported.

Secondary share sales are typically carried out at a discount to the last valuation in a primary fundraise. For example, in May last year, fintech firm Razorpay did a secondary share sale of $75 million at a valuation of $6.5 billion after having raised capital previously at a $7.5 billion valuation.

Lenskart founder and chief executive Peyush Bansal did not respond to ET’s email on the funding. A spokesperson for ChrysCapital declined to comment. An email sent to Alpha Wave Global didn’t elicit any response till press time Wednesday.

Kedaara Capital has an about 9% stake in Lenskart, while SoftBank and Premji Invest own nearly 19% and 10.4%, respectively. SoftBank, which first backed the firm in 2019, is its single largest investor.

Over the past few years, Lenskart has conducted secondary share sales to pave the way for partial exits to investors like Chiratae Ventures and others. Since inception in 2010, Lenskart has raised a total of $1.06 billion, including through secondary share sales, according to Tracxn, a data platform for privately held startups.

Lenskart financials

According to sources briefed on Lenskart’s recent financials, the company clocked about Rs 415 crore in sales in December, of which Rs 183 crore came from Owndays, which it acquired last year.

Lenskart spent about Rs 480 crore in the April-December period last year including monthly burn and capital expenditure for its new plant as well as stores across the country, people briefed on its financials said.

“They (Lenskart) have clocked decent sales growth and the last financial year numbers show the recovery made after Covid-19. Lenskart is hoping its Bhiwadi (Rajasthan) plant will play a key role in manufacturing locally and ship significant volumes,” a person aware of the matter said.

It has a plant in Haryana and the Bhiwadi unit is expected to start shipping products this year.

At the time of closing the Owndays acquisition last year, Bansal had told ET that the firm is aiming to grow by 60-70% in the ongoing financial year.

“While most of the 1,100 stores of Lenskart are in India, we will continue to expand with 400 new stores as we look to scale our revenue,” he had said.

Lenskart reported a nearly 66% growth in consolidated operating revenue at Rs 1,502 crore in FY22, signalling a recovery in sales after Covid-19. The company, however, reported losses of Rs 102 crore after having clocked a profit of Rs 28 crore in the previous financial year, regulatory filings showed.

Bansal also did not respond to ET’s query on Lenskart’s recent financials.

About 94% of Lenskart’s FY22 revenue came from sale of eyewear products while the rest was from subscription fees and other sources.

Sources aware of Lenskart’s internal plans said the company was expecting to turn profitable in FY23.

“Lenskart India and Owndays businesses are Ebitda positive, but they are losing money on international expansion,” a person who is aware of the company’s financials said.

While Lenskart has run its stores in Singapore, the Owndays acquisition was aimed at boosting its international presence across markets like Thailand, Taiwan, the Philippines, Indonesia, Malaysia, and Japan.

Bansal had told ET that the Owndays deal was a significant step in the company’s plan to build it like an Amazon or Maruti Suzuki.

Lenskart’s Neso Brands – a Thrasio-style venture – closed a financing of $100 million last year.

Neso is essentially looking to invest in global eyewear brands early on and leverage Lenskart’s network to expand these brands. Neso plans to take a majority stake in eyewear brands with a revenue of $10-50 million.



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