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Lenskart said on Wednesday it has signed a definitive agreement to raise $500 million from the Abu Dhabi Investment Authority, amid a market downturn as the Indian eyewear retailer expands its supply and scale to global markets.
The investment is an extension of last year and will help the startup reach a valuation of $4.5 billion. ADIA’s investment will include some secondary share buybacks, the startup said.
The 12-year-old Indian eyewear startup, which counts SoftBank and Alpha Wave Global among its backers, sells eyeglasses, contact lenses, contact lenses and other eyewear accessories. Undercutting the competition, it has become one of the largest eyewear players in India, offering premium eyewear at affordable prices.
Lenskart has been able to keep inflation down because it is bringing more efficiency in the eyewear sector, Lenskart co-founder and CEO Peyush Bansal told TechCrush in an interview. The company has built expertise in manufacturing its own spectacles and contact lenses and is the exclusive licensing partner for several technologies for international companies in India, he said.
The startup, which currently operates in India, Southeast Asia and the Middle East, sells its eye products online and through more than 2,000 stores, three-quarters of which are in India. The startup is opening more than seven stores a week and plans to produce 20 million pairs of glasses next year, he said.
Hundreds of millions of Indians need vision correction, but only a fraction of this population currently wears glasses or contact lenses. Bansal said the company will continue to expand its operations in India and its existing global markets, as it is not a significant presence.
But what has helped Lenskart and the eyewear industry in general is how fast Indians are taking up eyewear, he said. People are buying up to four pairs of glasses every two years, a figure that is growing closer to five, indicating the same popularity in the purchase of sneakers.
The startup has been gradually expanding its core offerings by acquiring Japanese eyewear brand Own Dayys and new in-house brands such as John Jacobs.
Lenscart, which posted revenue of more than $180 million by March 2022, is currently on a run of $5 million a month, a person familiar with the matter said. Bansal declined to comment on revenue figures but said the startup is profitable.
“The next phase at Lenskart is a journey from 10 to 100, focusing on building a diverse culture that enables innovation and performance, while solving the biggest hurdles of high-quality vision for all. We promise to continue to work hard with the same level of humility and dedication, and change the lives of a billion people.” I hope.
Lenskart’s funding comes at a time when deal flow has slowed significantly in the Indian startup market, especially for late-stage startups. The number of rounds of $100 million or more fell 50% to 48 in India last year — and most closed in the first half of 2022, Bain & Co said in a report on Wednesday.
In H2 2022, as global hedge funds and cross-border funds remained cautious, the share of investment by leading investors fell below 20 percent (from over 25 percent in 2021), the advisory firm said.
Lenskart is also careful about its costs, says Bansal, but asserts that for start-ups with a long-term vision, a sense of financial cycles is less important. The company is open to exploring additional acquisition opportunities, he said.
“Lenscart has established itself as one of the largest and most innovative eyewear companies globally. Given its technology-enabled and vertically integrated business model, we believe the company is well-positioned to build on its leadership position. This investment is in line with the region’s consumer-driven growth and rapid technological development in Asia.” It is a continuation of our strategy to invest in market-leading businesses in the region,” said Hamad Shahwan Al-Daheri, Executive Director of ADIA’s Private Equity Department, in a statement.
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