Pepperfry’s Net IPO Loss Shrinks Even as Revenue Falls

Before going public, furniture market Pepperfry cut its net losses by more than a third in 2020-21 (FY21) from a year earlier. The losses were reduced thanks to a 37% reduction in its marketing expenses, which accounted for almost a quarter of the company’s total expenses.

The company’s consolidated net loss backed by InnoVen Capital amounted to Rs 105.65 crore for FY21, down 37% from a net loss of Rs 167.29 crore for FY2019-20 (FY20). 2020), according to a statement shared by the company on Friday.

Helping to reduce losses during the reporting period, its marketing expenses fell to Rs 70.61 crore from Rs 112.13 crore in FY20. The company also reduced its logistics costs by a third to Rs 84.31 crore, from Rs 125.52 crore a year earlier, improving its total expenditure to Rs 326.81 crore in FY21 from Rs 412.76 crore in FY21 exercise 20.

However, in the pandemic-hit year, Pepperfry, owned and operated by Trendsutra Platform Services Pvt Ltd, saw a 13% decline in operating revenue on a consolidated basis.

Its consolidated operating revenue decreased to Rs 201.50 crore for FY21 from Rs 231.58 for FY20, which caused its total revenue to drop to Rs 220.99 crore from Rs 245.01 crore.

The company also more than halved its underlying loss before interest, tax, depreciation and amortization to Rs 36.70 in FY21 from Rs 94.67 crore in FY20. The company claimed to be profitable EBITDA (earnings before interest, taxes, depreciation and amortization) during the festival months of August and November 2020.

Pepperfry also claimed that 70% of its business was generated organically in FY21 and said 50% of business each month came from repeat customers.

The company said it revamped its merchandise selection to offer a wider range of furniture and furnishings, which helped it boost its average order value last year. The company says it has a 50% higher sales rate for January 2022 compared to the same month last year.

Pepperfry said he was making forays into the metaverse creating augmented and virtual reality solutions and wanted to create an all-virtual Pepperfry studio.

The company has about 73 showrooms in January and has crossed over 100 studios in 2021 through its franchise program. It further plans to have 150 studios by March this year. The company said it will explore high-margin white spaces like modular furniture and mattresses this year.

Pepperfry co-founder and COO Ashish Shah said VCCircle in an interview in October last year, that the company was planning to do an initial public offering (IPO) as early as June this year.

“We are raising a $50-100 million pre-IPO round. Although we have enough money in the bank, we will raise more money to line up a good set of investors on our side before we hit the IPO. We have been fortunate to have renowned investors on our board and would like to secure a similar cohort of big names,” Shah added.

Ann J. Cox