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The investment will be mainly through a secondary sale of shares with a small primary round consisting of growth capital at $4.5 billion. That’s more than double the market capitalization of Warby Parker Inc., a New York-based online retailer of prescription glasses, contact lenses and sunglasses that went public on the NISE last September.
Investors in 12-year-old Lenskart include Softbank, KKR, PremjiInvest, Kedaara Capital, Temasek, Falcon Edge, Bai Capital and Chiratae Ventures. So far, the company has raised a total of $1.05 billion in 19 rounds, according to Trackn. It has not yet been finalized which investor will dilute and by how much.
Once the investment is completed, ADIA will receive an almost 10% stake in Lenskart. A final announcement is expected in a few weeks. ADIA and Lenskart declined to comment.
Lenskart expanded its international footprint in Singapore, the US and the Middle East last year and even acquired a majority stake in Japan’s Ovendais in June, creating one of Asia’s largest online eyewear retailers. The acquisition will expand its direct-to-consumer (D2C) footprint in Southeast Asian markets, including Singapore, Thailand and Taiwan.
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The rapid expansion led to a 66% increase in operating income in the last fiscal year. However, the growth came at a price as the company slipped into losses in the fiscal year that ended in March. However, it is expected to be profitable in FY23 on a consolidated basis and is on track to achieve 50% growth in its India business alone.
Sales of eyewear products were the main source of revenue for Lenskart, contributing around 94.3% of total operating revenue in FY22, according to data from the Registrar of Companies (RoC). Subscription revenue grew by 14%, revenue from rentals, website license fees, scrap materials and customer service fees combined stood at Rs 36 crore in FY22.
Co-founder and CEO Peyush Bansal, 38, launched a multi-channel strategy on the e-commerce portal, and Lenskart has over 1,200 stores in the country and abroad. According to recent media reports, its most prominent domestic competitor, Tata Group’s Titan Eyeplus, has 760 stores. In 2021, Lenscart shipped around seven million pairs of glasses.
The company has a manufacturing unit in Haryana and is scaling up with a fully automated facility in Bhiwadi, Rajasthan to start in a few months. Billed as the largest eyewear factory in the world, it will enable Lenskart to supply up to 50 million pairs each year.
“This is not a technology company, but over time it has adopted a multi-channel approach and has also invested heavily in manufacturing and fundamentals. That’s why he managed to largely prevent the decline in technology value,” said the investor on condition of anonymity. “Technology is at the center, but it’s built on top of that.” So as it scales up, traditional PE investors or growth equity investors like TPG Growth, which later exited and now KKR, Temasek find the story attractive… It also invests in its private label and D2C strategy .”
EssilorLukottica, created by a €50 billion merger in 2017, is the largest eyewear company in the world with a market capitalization of €80 billion.
After backing core infrastructure and real estate, ADIA, which manages close to $800 billion in assets, has become an active investor in startups or emerging companies that have a strong consumer connection and brand appeal or work on cutting-edge biotech and frontier technologies, as well as several of her colleagues from sovereign wealth funds from the Middle East. Apart from Reliance Jio, Reliance Retail, PharmEasi and Taibang Biologics, ADIA has backed major renewable platforms such as Greenko and Renew.
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