Ingka Group, the franchise partner of furniture giant Ikea, has picked up a minority stake in online home design startup Livspace.
Livspace did not disclose the size of investment, but two sources told Mint the company received USD 10-15 million. It plans to use the money to develop new home interior products and expanding its offline presence.
This is Ikea’s first deal in the country. Ingka Group operates 367 Ikea stores all over the world, including in India. It fetches 90% of Ikea’s sales. Ikea opened its first India-based store in Hyderabad last year and, having gained FDI approval to operate retails store, it is planning to open at least 25 new stores.
The strategic investment will also enable knowledge sharing between Ingka and Livspace.
Ramakant Sharma, co-founder of Livspace, told Mint, “While it is a minority stake, this is a significant investment for us. The idea is to collaborate on retail technology, supply chain, among many other things.”
Anuj Srivastava, chief executive of Livspace, said in a statement, “This investment gives us the opportunity to create one of the best omnichannel interiors and furniture purchase experience for homeowners. On the other hand, interior designers and vendors can anticipate a richer design and supply experience."
Srivastava admitted to TechCrunch that Ikea’s involvement could fuel an international expansion beyond India. Since Livspace has openly talked of going overseas in the past, Ikea’s global footprint could be of help to the company.
In October last year, Livspace raised USD 70 million in a Series C funding round led by private equity firm TPG Growth and Goldman Sachs. The company’s existing investors Jungle Ventures, Bessemer Venture Partners and Helion Ventures had also participated in the round.
Livspace was launched in late 2014 by Srivastava and Sharma, former senior executives at Google and Myntra. The company, which primarily competes with Sequoia Capital-funded HomeLane and bigger furniture e-retailers Pepperfry and Urban Ladder, offers a marketplace for customers to buy interior designs online from designers. It also offers software tools for designers to streamline their workflow.