Our aim is to grow 3 times by next year: Pepperfry

Pepperfry, the name of a furniture brand and not those famous Chettinad dishes which go by that name, has taken a new arc by raising Rs 210 crore in a fresh round of funding from current investors Goldman Sachs, Bertelsmann India Investments (BII), Norwest Venture Partners (NVP) and Zodius Technology Fund. Incidentally, in a time of fund crunch and a large number of startups in various sectors being shut down in the sector in India, Pepperfry has managed to snag the largest investment this year.

Ambareesh Murty, Co-founder and CEO, along with Ashish Shah, Co-founder and COO, set up Pepperfry with an aim to be distinct in the market and set up a legacy. Happy at the way the company has progressed making that dream closer to fruition, Murty talks about entrepreneurship, its challenges and the success formula that worked for the online furniture marketplace. Excerpts:

Your thoughts on snagging the largest investment in a pure-play e-commerce space in India this year…

We have made a few good decisions in the last few years. We had a strategy in place and did not change tracks or look at expansion. We have no core competitors in the space. We had money in the bank with Goldman Sachs on board and we needed additional money to carry out long-term plans. Also, we had a bit of luck. We are in a category where there are no brands. Shoes or mobile phones as a category have the top five players who own 60 per cent of the market share, for instance. In home furniture, top players own only four percent of the market share. We will use this latest round of funding for increasing our supply chain, the brands we have built, expand the number of experience centres from 17 as of now and make investments in technology.

What are your margins?

We are a high-margin business and make a lot of money on the products we sell. Our margins in topline is 40 percent and above. The average furniture ticket size is Rs 18,000. We sell decor and furnishing, too. If we were to take both this and furniture, then the average ticket size would come to Rs 11,000. We have bespoke design service centres in Mumbai, Delhi, and Bengaluru called Pepperfry Bespoke. We plan to extend these centres to all places where we have an experience centre. We have 17 experience centres so far where anyone can drop in and get advice on how to furnish their room or house. This service is free.

What is the most bought items of furniture?

Youngsters in the 22-30 age group, who are not yet married, buy low-value products like shoe racks, coffee tables and comprise a large number of our transactions. These could be in the range of Rs 5,000 to Rs 9,000 for shoe racks and coffee tables could go up to Rs 12,000 a piece depending on the material – wood or engineered wood.

What was your intention and dream when you set out to startup PepperFry?

Ashish and I are ex-eBay guys where we worked in senior positions for around six years. We got along well and were friends. We decided to chuck our jobs somewhere in mid-2011 and launch a startup. I was 38 then and Ashish 34. When we decided to startup, we were not interested in electronics and wanted to do a business that would be differentiated in the marketplace. As we put our plans together, we had a clear blueprint on how the business would be, whichever we chose. The firm had to stand for everything that is Indian. It had to be honest in its dealings with customers and dealers and wanted to have fun while running it together. When we started off, we also added fashion as a category, but soon discontinued it. That was a wise thing to do, on hindsight. Neither Ashish nor I are passionate about fashion.

What are your plans for PepperFry?
We want to grow the company to 3x by 2017.

By Sulekha Nair

Source: FirstPost.com