Livspace Engages in Acquisition Discussions with HomeLane
- ByStartupStory | May 17, 2023
Livspace, the omnichannel platform for home interior and renovation, is reportedly in discussions to acquire HomeLane, its rival in the market. This potential transaction has been disclosed by three sources familiar with the matter.
According to an anonymous source familiar with the matter, “discussions between Livspace and HomeLane have been ongoing for several weeks, and the final terms of the deal are being finalized”.
In the event that the ongoing talks result in a successful agreement, the merged entity would establish itself as the leading phygital platform in the home interior and design space.
Sources indicate that HomeLane might face challenges in raising additional funds, despite having secured $50 million in its previous funding round in September 2021. The current valuation of HomeLane is estimated to be approximately $250 million.
According to an undisclosed source, “the proposed deal is expected to involve primarily stock and include a partial cash component”. The source also preferred to remain anonymous.
It is worth mentioning that Livspace has set aside $100 million specifically for strategic acquisitions. In October 2022, the company announced that a significant portion of this fund would be allocated towards acquisitions as part of its expansion plans within current markets and the addition of new categories.
After a considerable hiatus, Livspace is making a new startup acquisition. The company previously acquired DezignUp, Dwll.in, and YoFloor back in 2015.
Livspace, along with HomeLane, specializes in assisting property owners with furnishing and installing fixtures in their new residential spaces. Livspace holds the leading position as the largest omnichannel firm within this industry and achieved unicorn status after successfully raising a Series F funding round worth $180 million in February of the previous year.
Accel emerged as the largest stakeholder in HomeLane following its recent funding round, owning a 17.4% stake. Meanwhile, Sequoia Capital and IIFL held 11.5% and 10.8% shares, respectively.
In terms of revenue, Livspace surpassed HomeLane in the fiscal year ending in March 2022. Livspace reported a revenue of Rs 570 crore, but also incurred a loss of Rs 646 crore during FY22. On the other hand, HomeLane achieved a topline of Rs 426 crore but experienced a loss of Rs 153 crore in the same fiscal year.
During the ongoing funding winter, both Livspace and HomeLane have undergone workforce reductions. Livspace reportedly terminated over 100 employees, while HomeLane let go of approximately 30-40 employees in March of this year, as per reports.
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