This is what Ratan Tata's investment did to Lenskart
Though the investment is low, the valuation of the company has shot up
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Online retailer Lenskart Solutions Pvt. Ltd, that sells eyeglasses, sunglasses, contact lenses and eyewear accessories, has reportedly received an investment from none other than Ratan Tata himself, according to a report in Live Mint. According to three officials requesting anonymity, the investment is a part of Lenskart's fund raising initiative where the firm, looking to raise almost Rs.400 crore, received an investment by Tata, Chairman emeritus of Tata Sons Ltd.
The amount of investment is still undisclosed but what is known is that it conforms to Tata's habit of not making huge investments, going as low as 10 lakh (Mint). "The quantum of his (Tata's) investment is small, keeping in line with his investment thesis. His approach is more of a mentor/adviser rather than a financial investor," the official said, declining to comment on the exact quantum of investment made by Tata.
With the latest funding, Lenskart Solutions will be valued at Rs1, 600 crore (about $240 million). In the past, International Finance Corporation (IFC), an arm of World Bank, also expressed its plan to make an investment of Rs.170 crore in Lenskart. Commenting on the same, a second official said, "IFC is the lead investor in this round. Discussions are still going on with them. Existing investors TPG Growth and IDG Ventures are likely to participate in this round." The funding will help the company grow its distribution network across tier II and III cities through the offline franchisee partner network, this person added.
IFC stated that Lenskart will use the funds to set up a state-of-the-art manufacturing, processing and assembly facility with a capacity to process more than 20,000 pairs of eye glasses daily by the financial year 2021. "The Company has provided quality eyewear products at affordable prices to over 600,000 people in FY15, and this number is projected to increase to more than 5 million by FY21," IFC said.
Investment-wise, Lenskart has seen a bright past and hopefully will see a bright future. Launched in 2008, Lenskart has been able to expand significantly. In January itself, Lenskart had raised Rs.135 crore in a series C round led by TPG Growth. In 2013, they received an investment of Rs.53 crore from Ronnie Screwvala-led Unilazer Ventures Pvt. Ltd and IDG Ventures.
What are they going to do with all this money? The focus of the firm will be sales and marketing, majorly focusing on offline mode. Through a network of franchises partners, they long to build an offline presence, a well decided move often made by jewellery and furniture portals. This will help them achieve better conversion rates by allowing customers to experience products before they purchase online.
This goes in accordance with the interview of Peyush Bansal, founder of Lenskart, given to Economic Times where he talked about their plan to expand by opening 1,000 brick-and-mortar shops through the franchise model. These shops, which will also enable delivery, service and return of products ordered online, will enable the company to expand quickly, while remaining asset-light."
The idea is great and we hope Lenskart "s vision is as clear as the glasses they provide.
(With inputs from Live Mint)