Lenskart has signed a definitive agreement to raise $500 million from the Abu Dhabi Investment Authority, they said on Wednesday, at the height of the market crisis as the Indian eyewear retailer ramps up its offerings and adapts to international markets.
The investment, an extension of last year’s cycle, helps the startup retain its $4.5 billion valuation. ADIA’s investment includes a secondary stock purchase, the startup said.
The 12-year-old Indian eyewear startup, which counts SoftBank and Alpha Wave Global among its backers, sells eyeglasses, sunglasses, contact lenses and other eyewear accessories. It has become one of the biggest eyewear players in India by cutting down the competition, offering premium eyewear at affordable prices.
Lenskart has been able to keep prices low as it brings more efficiency to the eyewear industry, Peyush Bansal, co-founder and CEO of Lenskart, told TechCrunch in an interview. The company has acquired the expertise to manufacture its own glasses and contact lenses and for many technologies it is the exclusive licensing partner for global companies in India, he said.
The startup, which currently has operations in India, Southeast Asia and the Middle East, sells its eye products online and in more than 2,000 stores, three-quarters of which are in India. The startup opens more than seven stores a week and expects to make 20 million pairs of glasses next year, he said.
Hundreds of millions of Indians need vision correction, but only a fraction of this population currently wears glasses or contact lenses. Bansal said the company will continue to expand its operations in India and existing international markets where it does business, as they remain severely underserved.
But what has helped Lenskart, and the eyewear industry as a whole, is how quickly Indians are adopting eyewear, he said. People buy up to four pairs of glasses every two years, a figure that rises to five, he said, pointing to similar popularity in sneaker purchases.
The startup is also slowly expanding its premium offerings, thanks to the acquisition of Japanese eyewear brand OwnDays and its new house brands like John Jacobs.
Lenskart, which posted revenue of more than $180 million in the fiscal year ending March 2022, is currently on a monthly run of around $5 million, according to a person familiar with the matter. Bansal declined to comment on revenue figures, but said the startup was profitable.
“The next phase at Lenskart is a journey from 10 to 100 where we focus on building a diverse culture that enables innovation and execution at scale while solving a significant bottleneck that impedes a vision high quality for all. I hope we can continue to work hard with the same level of humility and dedication and eventually transform the lives of a billion people,” Bansal said.
Lenskart’s funding comes at a time when deal flow activity has slowed significantly in the Indian startup market, especially for late-stage startups. The number of rounds of $100 million or more fell 50% in India last year to just 48 – and the vast majority of them closed in the first half of 2022, Bain and Company said in a report Wednesday.
The investment share of major investors also declined to less than 20% (from 25% and more in 2021) as global hedge funds and cross-funds showed caution in the second half of 2022, the consultancy said. .
Lenskart is also careful with its spending, Bansal said, saying, however, that for startups with long-term visions, the mood of funding rounds doesn’t matter as much. The company is open to exploring other acquisition opportunities, he said.
“Lenskart has quickly established itself as one of the largest and most innovative eyewear companies in the world. Given its vertically integrated and technology-driven business model, we believe the company remains well positioned to further its leadership position. This investment is a continuation of our strategy to invest in highly differentiated and market-leading businesses in Asia linked to the region’s consumer-driven growth and rapid technological advancements,” said Hamad Shahwan Al. Dhaheri, executive director of the Private Equity department at ADIA, in a statement.