TCC Concept, a BSE-listed real estate service provider, said on Friday it had executed a term sheet to acquire up to 100% shares of omnichannel furniture retailer Pepperfry. The company did not close any financial terms of the deal, but it was likely below Pepperfry’s last-known valuation since it was struggling to scale and looking for potential buyers.
Pepperfry was last valued at $367 million. or more than Rs 3,200 crore, following a Rs 43-crore fundraise in June this year. TCC’s market cap, as of Friday’s close, is Rs 1,846 crore. Shares of the company hit an upper circuit of 5% at Rs 543.35 following the announcement.
Pepperfry struggles with low sales
Pepperfry has reportedly been looking for a buyer since last year, as sales slowed down and profitability remained out of reach. The company also shelved its IPO plans following the sudden demise of its co-founder and former CEO, Ambareesh Murty, in August 2023. Its other co-founder Ashish Shah was elevated to CEO.
The company’s revenue dropped 30.6% year-on-year in FY24 to Rs 188.98 crore, while it managed to narrow losses by 37% to Rs 117.4 crore from Rs 187.6 crore in the previous year, by nearly halving its advertising costs and sharply reducing its employee-related expenses.
Starting as an online-only platform, Pepperfry has expanded to more than 200 physical stores in FY24 and competes with players such as Wooden Street and Reliance-backed Urban Ladder, in addition to legacy and local furniture retailers. Shah and Murty had co-founded the company in 2012.
TCC Concept acquisition aim is to boost its place in e-commerce
In its filing to the exchange on Friday, TCC Concept said the acquisition was intended to strengthen its presence in the e-commerce space, complementing its core focus on technology-driven platforms. Besides commercial real estate, the company also provides co-location and hosting solutions for data centres and has a data analytics platform for real estate stakeholders.
“By integrating Pepperfry’s established furniture and home goods marketplace with TCC’s innovation and digital expertise, the company aims to enhance customer experience, create operational synergies, and unlock new growth opportunities,” it said in the filing.