IFC to invest up to $25M in Lenskart

International Finance Corp, the private lending arm of the World Bank, is on course to its second investment in an Indian e-commerce venture. It has committed to put in $25 million (Rs 170 crore) in Delhi-based Lenskart Solutions Pvt Ltd, which runs the back-end wholesale supply business of eye-wear etailer Lenskart.com, in lieu of a minority stake, according to a disclosure.

The proposed investment by IFC is part of the company's ongoing fundraising plan, with additional capital being provided by some of the existing and new investors.

Its investors include leading private equity (PE) and venture capital investors like TPG Growth, IDG Ventures, Unilazer Ventures and TR Capital.

It, however, could not be ascertained immediately how much money the firm is raising overall and from who all. An email sent to the company seeking further information on the aforesaid development did not elicit any response.

Lenskart Solutions, formerly known as Valyoo Technologies Pvt Ltd, plans to use IFC's funding for expanding its product distribution through its network of independent franchisee partners across India including into tier 2/3 cities.

It will also set up a manufacturing, processing and assembly facility with features like robotic manufacturing of lenses, cutting and fitting of prescription lenses for eyeglasses with the capacity to process more than 20,000 pairs of eyeglasses daily by FY21, according to IFC's disclosure.

Lenskart, which was started in 2008, is promoted by co-founders Peyush Bansal, Amit Chaudhary, Neha Bansal and Sumeet Kapahi.

Its wholesale entity is currently engaged in the assembly, wholesale distribution and supply of affordable eyewear products, including the merchandise for Lenskart.com.

Since foreign investment in e-commerce is not allowed, firms have formed two-tiered legal structures with the front-end retail site being owned by Indians while its backbone that operates the wholesale supply chain counts venture investors. The investors' money powers the e-commerce venture at large.

The company had initially raised $4 million in its first round of funding in 2011 from IDG Ventures. A year later, it brought in media veteran turned investor Ronnie Screwvala's Unilazer Ventures on board as it raised another $10 million.

Both these existing investors pitched in with $5 million more in early 2014 and later that year, Lenskart further raised $22 million in a Series C round from TPG Capital, Hong Kong-based TR Capital and IDG Ventures, that valued the firm at around $100 million, according to VCCEdge, the data research platform of VCCircle.

Lenskart sells and delivers across 531 cities including 148 cities in Bihar, Jharkhand, Uttar Pradesh, Madhya Pradesh, Odisha and Rajasthan through its independent franchisee partners. The company claims to have over 90 franchisee partners and plans to increase it to 400 franchise stores and 800 home eye checkup teams by financial year 2021.

Its eyewear products reached 600,000 consumers in financial year 2015 and it plans to increase this to more than five million by the end of financial year 2021, supported by the expansion undertaken as part of this project.

Last year, the company closed down three sister sites—Jewelskart.com, Bagskart.com and Watchkart.com. Click here  on this for more.

Meanwhile, for IFC, this marks the second deal in the Indian e-commerce sector. It is in the process of investing $25 million in the firm that runs the back-end of grocery e-tailer BigBasket. That, too, is part of a larger funding round.

Besides making direct investments in India and other markets, IFC is also an investor in other PE/VC firms active in India. As a result, it also separately has indirect exposure to the e-commerce sector at large.