The eyewear startup, Lenskart, secured a $500 million investment from the Abu Dhabi Investment Authority (ADIA), despite a worldwide tech slump causing thousands of layoffs, diminished investment activity, and significant depreciation of once-thriving businesses.
This deal, comprising both primary and secondary shares, positioned ADIA as one of the largest shareholders of Lenskart. It comes at a time when major investors in other Indian startups strive to safeguard their earnings amidst a shrinking market. In Lenskart, which has a $4.2 billion market value, the ADIA is said to have purchased a 10 percent share.
Evolving into India’s largest optical brand, Lenskart enjoys the backing of prominent companies like KKR & Co, SoftBank Group Corp, Temasek Holdings, and PremjiInvest.
Peyush Bansal, who co-founded Lenskart in 2010, leveraged technology and supply chain automation to offer eyeglasses and contact lenses directly to customers.
The business purchased the majority of Owndays of Japan in June, at a valuation of $400 million. The eyewear company has experienced good profits, and in the fiscal year 2022, its data rarely indicated any issues.
Strong channel management and quick delivery time propel Lenskart’s growth
Lenskart has made significant investments in technology since its inception. With the use of the company’s clever app, customers can virtually try on glasses and personalize them more effectively. Due to this personalization, which has improved conversion rates, the company reported a net profit of INR 29 crore in FY21.
In contrast, Lenskart experienced a net loss of 102.3 crores in FY22, compared to a profit of 29 crores the previous year, due to a significant increase in total expenses that offset other income of roughly INR 115 crore.
Total spending increased by 73 percent to INR 1,726 crore in FY22, with the company allocating approximately INR 234.6 crore, a 72 percent increase, to advertising and marketing. During the year, employee costs increased by 53 percent to INR 245 crore.
Lenskart is rapidly expanding its presence online and in physical stores. The business has one of the most extensive omnichannel presences in India and relies on a robust channel management approach. According to a report from the corporate affairs ministry, it recorded a 66 percent increase in operating revenue, reaching INR 1,502.7 crore.
Unlike many other eyewear companies in the country, Lenskart operates its own manufacturing facilities instead of merely branding its products. The self-manufacturing units guarantee quick delivery times and higher conversion. Furthermore, Lenskart’s at-home shopping option enhances customer satisfaction and expands its market reach.
