The six-year-old company manufactures and sells mattresses, pillows, accessories, and furniture majorly via the internet.
What's happening: The company's losses increased 2.8X to Rs 102 crore in FY22 from Rs 37 crore in FY21 due to increased expenses.
In FY22, the company's cash outflows increased X2.3 times to Rs 160 crore.
By the numbers: Materials costs were the most significant cost driver for the Bengaluru-based firm in FY22, accounting for 51% of total expenses.
In the previous fiscal year, this cost increased by 54% to Rs 373.5 crore.
The company spent Rs 58.12 crore and Rs 41.54 crore respectively towards transportation distribution and contract costs which pushed Wakefit’s total expenditure by 62.6% to Rs 738 crore in FY22.
Wakefit has spent Rs 1.17 in order to earn one rupee.
The company's ROCE and EBITDA ratios fell to -29.38% and -14.36%, respectively, due to a significant increase in losses.
Wakefit is inspired by the B2C brand Casper (Know more about Caspar)
Backdrop: With a direct-to-consumer model, Wakefit was an early member in the sleep solution space.
Since its inception in 2016, the Sequoia Capital-backed mattress, pillow, and furniture brand has grown rapidly.
Its scale over the last four fiscal years, which has increased more than eightfold to Rs 633 crore in FY22 from Rs 73 crore in FY19, validates its growth story.
What else: Wakefit's scale has grown over the last four fiscal years, and the company has emerged as the poster boy in the sleep solution space.
However, the company is now betting big on furniture, which is expected to account for more than two-thirds of its revenue in the coming years.
Wakefit expanded its presence in this category by opening a plant in Hosur (Bengaluru) with a capacity of 8,000 furniture pieces (sofas, dining tables, and beds) per day.
What next: Wakefit expects to earn Rs 1,000 crore in the current fiscal year (FY23).
In contrast to Wakefit's model, which relied heavily on digital channels, industry observers believe the omnichannel furniture space is an operations-heavy category with significant offline components.
Summary: in light of Wakefit's increasing success, the expenses have also risen, resulting in resultant losses increasing threefold from the previous year's records.
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