HomeLane, an interior decor solutions provider, is set to acquire its competitor Design Cafe in a share-swap transaction. HomeLane also secured around $30 million in fresh funding from investors, including Hero Enterprise and WestBridge Capital. The transaction is subject to regulatory approvals.
The combined entity is expected to be valued at approximately $360 million. HomeLane projects that the merged company will achieve Ebitda profitability and generate revenue of $120 million in FY25. Currently, the two companies claim a combined revenue of about $108 million.
Post the acquisition, HomeLane, Design Cafe, and HomeLane’s affordable home interiors division, Doowup, will continue to operate as distinct brands, catering to different market segments. The combined entity aims to serve a more niche premium target market.
Sunil Kant Munjal, chairman of Hero Enterprise, expressed confidence in HomeLane’s business model, noting potential synergies with Hero Realty.
HomeLane’s co-founders Tanuj Choudhry and Srikanth Iyer said the merged entity will leverage a tech-driven approach combined with Design Cafe’s design expertise. Iyer highlighted the growth potential in India’s large market for interior décor providers.
The acquisition marks a significant consolidation in India’s home interiors segment, estimated to be a $20-billion industry. While largely dominated by unorganised local players, companies like HomeLane and Livspace have achieved scale, crossing the Rs 1,000-crore revenue mark.
HomeLane, founded a decade ago, operates in 30 cities and claims about 45,000 customers. Design Cafe, established in 2016 by Gita Ramanan and Shezan Bhojani, has raised nearly $30 million in funding and is present in 10 cities across India.
The new capital is expected to fund HomeLane’s expansion into new markets, including tier 2 cities, where the company reports rising demand.