HomeLane forayed into commercial interiors at the beginning of this year and the vertical will account for 10% of its revenue this year at about ₹80 crore, Iyer, also the chief executive officer of the company, told Mint.
The commercial vertical, branded as Cubico, alone has the potential to become a ₹1,000-crore business in the next five years, he said, citing lack of peers in the segment. “You have players who do the Infosys office or Microsoft office who are large integrators,” he said. “They are untouchable, but between 50 and 500 seats specifically, which we call the SME segment, there are no brands.”
“We believe that there need to be at least 100 brands in the space, and we want to be one of the dominant ones,” said Iyer. “We have made a good start, and I think this year we will surely get to ₹80-100 crores of revenue.”
But offering interiors solutions to commercial enterprises comes with its own challenges. It’s a highly cost-sensitive market where medium-scale vendors often engage in cutthroat pricing, posing the challenge of delivering durable, cost-effective interiors within tight timelines, said Rhea Sawant, an architect and Founder of Tinge by Rhea Truptes, a boutique interior design firm. “With many commercial spaces being procured on a lease basis, the urgency to execute projects swiftly is paramount.”
HomeLane is also working on newer services in its mainstay home interiors business. It started piloting Wrap Zap four months ago, offering makeover of small spaces like bedroom, kitchen or living room with wall painting, wallpaper & wall panelling, among other services, in one or two days.
“We are still doing PMF (product market fit) testing,” Iyer said. “I have not invested crores of marketing money in it yet, but if we get PMF, we will do that.”
Expansion plans
HomeLane is present in 25 cities, including 7 metros and 18 tier-2 cities. This number can easily go to 50 in the next two years, according to Sriknath. “We have seen that in the tier 2 markets, there is a high demand for branded players for home interior solutions and there is a propensity to pay premium as well.”
While Srikanth admits that the tier 2 and 3 markets are not yet proven, he is not worried as the company, according to him, has only scratched the surface in metros. “The percentage of people who still go to unorganized players in a city as well exposed as Bangalore is still about 75%,” Iyer said. “Even if I convert one third of that into organized, it is huge. It’s a combination of going deeper in the markets that we are already present in, plus new markets. In fact, the bigger opportunity is going deeper in the existing markets.”
The home interiors segment, pegged to be a $20-billion industry, is largely driven by unorganized local players and has seen very few businesses of scale emerge. Earlier this month, HomeLane acquired smaller peer Design Cafe.
The company has expanded its target market to more premium customers with the acquisition. While HomeLane is more focused on tech, the founders of Design Cafe being architects have had more focus on the design journey, Iyer said.
Design Cafe was put on the block as it was unable to scale up and existing investors were unwilling to pump in more funds, Mint had reported.
Iyer sees more consolidation happening in the industry. “We may not do it anymore, but I think it will, it’s inevitable and it’s bound to happen, simply because funding has become more difficult.”
The total funding in the home interiors market has come down from $200 million in 2022 to $26 million in 2023 and 0.028 million in 2024 so far, according to data sourced from Tracxn.
HomeLane and Livspace are the two large interior design start-ups and have raised significant investor capital by marquee investors.
Homelane has raised a total funding of $160 million from Westbridge Capital, Peak XV, Accel, JSW Ventures, among others. It raised $27 million in its latest round earlier this month. The company plans to use the funds to expand its presence and invest in newer solutions.
Other players in the market include Arrivae, Bonito Design and Decorpot.
Mighty ambitions
HomeLane is targeting a four-fold growth in revenue in the next five to six years to ₹2,500-3,000 crore on the back of new product categories and expansion plans, Iyer said.
“I am looking at ₹1,000-2,000 crore revenue in the next two to three years and then reaching from 2,000 to 3,000 crore in the next 2 years,” said Iyer said. HomeLane and Design Cafe together generated sales of ₹761 crore in FY24, with HomeLane accounting for ₹618 crore. The company posted a revenue of ₹574 crore at a loss of ₹173.5 crore in FY23.
