Omnichannel mattress and furniture retailer Wakefit.co has transitioned to a public company in preparation for a potential IPO.

The Bengaluru-based firm has changed its legal name to “Wakefit Innovations Limited,” dropping the “Private” designation, according to filings with the Registrar of Companies.

The company aims to list its equity shares on stock exchanges to provide a formal trading platform for shareholders.

Wakefit.co has also returned to EBITDA profitability, reporting a 24% revenue increase to 1,017 crore rupee (US$118.7 million) for FY24, along with 65 crore rupee (US$7.6 million) in EBITDA.

It projects double-digit growth for FY25.

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🔗 Source: YourStory

🧠 Food for thought

1️⃣ Furniture IPOs follow profitability-first pattern

Wakefit’s IPO preparation after achieving EBITDA profitability reflects a common trend in furniture retail public offerings, where profitability often precedes market entry.

This contrasts with tech startups that frequently go public while still loss-making, as furniture retailers typically need to demonstrate financial stability to attract investors.

When Lovesac went public in 2018, it had already established profitability metrics that helped it raise $56 million in its IPO, with shares opening at $25 (56% above the $16 offering price)1.

The furniture sector’s physical product nature, with high logistics costs and inventory management challenges, makes positive unit economics crucial before approaching public markets.

Wakefit’s Rs 65 crore EBITDA achievement signals to potential investors that the company has found sustainable operational efficiency, addressing the key concern that typically affects furniture e-commerce players.

2️⃣ Omnichannel strategy essential for furniture retail success

Wakefit’s self-description as an “omnichannel” retailer reflects an important industry insight: successful furniture companies increasingly require both online presence and physical showrooms.

Lovesac’s pre-IPO business model transformation included expanding to 70 showrooms primarily in malls, demonstrating the importance of giving customers opportunities to experience products physically despite being known for direct-to-consumer sales1.

The online furniture market has shown significant growth potential—furniture e-commerce sales rose 18% in 2015 and now represent 15% of the $70 billion U.S. furniture market—but physical presence remains critical for consumer confidence in big-ticket purchases1.

Parin Furniture’s market strategy similarly emphasizes both manufacturing capabilities and retail presence with flagship stores and approximately 900 dealers across 18 states2.

This dual approach helps furniture retailers overcome the challenge of selling products that consumers traditionally want to test before purchasing, while also capturing the efficiency and reach benefits of digital sales channels.

3️⃣ Market fragmentation creates IPO opportunity in furniture retail

The home furnishing retail sector remains notably fragmented, with an absence of large-cap stocks and dominance by mid, small, and micro-cap companies, creating potential opportunity for Wakefit to establish significant market presence through public funding3.

According to sector analysis, the home goods market was valued at over $233 billion in North America with only 7% transacted online (as of 2014), suggesting substantial growth runway for digital-first companies with omnichannel capabilities4.

The furniture industry has seen multiple successful public offerings despite this fragmentation, including Wayfair’s 2014 IPO (at approximately $2.5 billion market cap) and Lovesac’s 2018 offering, demonstrating investor appetite for innovative furniture retail models41.

India’s furniture-furnishing industry specifically comprises 26 stocks with an average market capitalization of ₹966 crore, indicating room for Wakefit to potentially emerge as a significant player in the public markets5.

By converting to a public entity while achieving EBITDA profitability, Wakefit appears to be positioning itself to capitalize on this market opportunity while addressing the financial stability concerns that public market investors typically have for this sector.

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