Pepperfry, once a rising star in India’s furniture retail scene, is at a crossroads. After years of trying to scale up, the company is now seeking a buyer to rescue it from stagnating growth and consistent losses. The brand, which made its name as an omnichannel player—offering both online and offline furniture shopping—has been unable to match the pace expected by its investors.
Credits: Money Control
The question now is: who’s going to take on this challenge? As Pepperfry’s story unfolds, we explore what’s at stake, who might step in to save the day, and how the furniture game is set to change.
Pepperfry’s Fall From Grace
The startup was a force to be reckoned with a few years ago, but things have cooled down. Revenue climbed from ₹207 crore in FY19 to ₹290 crore in FY23, but that’s only a 10% growth rate—a figure far too modest for venture capitalists accustomed to rapid scaling. Meanwhile, losses have been stubborn, sticking around ₹180-190 crore each year.
The company’s attempt to go public fizzled out, and to make things tougher, co-founder and CEO Ambareesh Murty passed away in 2023. Murty’s leadership had been key to Pepperfry’s earlier successes, and his death was a huge blow, leaving a leadership vacuum that’s been hard to fill.
Credits: ET Retail
Who’s Going to Save Pepperfry?
With Ambit investment bank leading the search, Pepperfry’s investors are exploring various options, from a sale to a larger rival to a strategic acquisition by companies outside the furniture space. This opens up some intriguing possibilities:
Paint Giants Eyeing Expansion: Companies like Nerolac, Berger Paints, and Asian Paints are reportedly interested. These brands are already venturing into home services, and buying Pepperfry could give them a direct entry into the furniture and home decor market. Imagine choosing a paint color, then instantly being able to buy matching furniture—all from one company!
Livspace Looking to Dominate: A big player in home interiors, Livspace could view this as a chance to consolidate its market position. By absorbing Pepperfry, Livspace could create an even more comprehensive offering, with an online marketplace and a wider network of showrooms.
B2B Powerhouses in the Mix: Infra.Market, which has been building its own portfolio of home makeover solutions, might also consider acquiring Pepperfry. It’s all about diversification and grabbing a bigger piece of the home improvement pie.
The High-Stakes Furniture Race
India’s furniture market is a battlefield. Players like Reliance-owned Urban Ladder, IKEA, Wakefit, and Wooden Street are all vying for consumer attention, and profitability remains elusive for many. With Pepperfry potentially being absorbed into a larger entity, we could see the market shift in major ways.
Consolidation: If Livspace or another large player makes a move, the market could see greater consolidation. This would give the acquirer more leverage over suppliers and logistics, potentially driving down costs and squeezing out smaller competitors.
Diversification: On the other hand, if a paint company steps in, the market could get more exciting. By adding furniture and decor to their paint services, these brands would offer customers a one-stop-shop for all their home makeover needs. That’s a big shift from just selling paint and could reshape how Indian consumers approach home decor.
What’s Next for Pepperfry?
The stakes are high for Pepperfry. A sale could provide the financial boost needed to turn the business around, but if talks fall through, the company may face a tougher road ahead. And let’s be honest—investors won’t wait forever. With its valuation having dropped from $330 million to a more modest $200-220 million, Pepperfry needs a savior—and fast.
Whether it’s Livspace consolidating its hold, or a paint company making a bold move, the next few months will determine not only Pepperfry’s fate but could also redefine the landscape of India’s home furnishings industry.
