Lenskart’s Stellar Financials Attract $600 Million Investment

Eyewear retailer Lenskart has successfully secured $600 million in funding from the Abu Dhabi Investment Authority and ChrysCapital between March and June 2023. This significant investment appears to be a direct result of the company’s impressive financial performance in the fiscal year ending March 2023 (FY23).

Revenue Soars, Losses Decline

Lenskart’s financial statements, filed with the Registrar of Companies (RoC), reveal a substantial increase in revenue from operations. The company’s revenue surged to Rs 3,788 crore in FY23, a considerable jump from Rs 1,502 crore in FY22, reflecting a growth rate of over 2.5 times. Additionally, Lenskart managed to reduce its losses by 37% during the same period.

Breakdown of Revenue Sources

The core of Lenskart’s revenue generation comes from eyewear sales, with collections from India contributing 59% of the total in FY23. The remaining income is attributed to the company’s international operations in markets like Singapore, Dubai, the US, and Southeast Asia.

Expense Management and Profitability Metrics

Lenskart’s financial statements also shed light on the company’s cost structure. Procurement of lenses and frames accounts for roughly 34% of the overall expenditure. While this cost increased by 2.28 times (from Rs 599 crore in FY22 to Rs 1,369 crore in FY23), other expenses were kept under control. Employee benefits, rent, advertising, commissions, and other overheads contributed to a total expenditure of Rs 4,025 crore in FY23 compared to Rs 1,726 crore in FY23.

This balanced approach to scaling the business while managing expenses effectively resulted in a 37.3% reduction in losses. Lenskart reported losses of Rs 64 crore in FY23, down from Rs 102 crore in the previous year. The company also achieved a return on capital employed (ROCE) of 0.24% and an EBITDA margin of 11.1%.

Investment History and Future Plans

Lenskart has secured over $1.6 billion in funding to date, with its most recent valuation reaching $4.5 billion after a $100 million fundraising round in June 2023. Softbank is currently the largest external stakeholder, followed by Premji Invest and Kedaara Capital, as per TheKredible, a startup data platform. Lenskart’s enterprise value to revenue multiple stood at 2.8X in FY23, according to Fintrackr estimates.

Recent media reports suggest that Lenskart is exploring a secondary funding round of $200 million from Temasek and Fidelity, potentially pushing its valuation to $5 billion. The company’s founder and CEO, Peyush Bansal, has also expressed plans to acquire land near the Bengaluru airport for establishing a mega-factory.

Looking Ahead: A Strong Brand and Global Aspirations

Lenskart’s consistent efforts are finally yielding significant rewards. The company has built a powerful brand identity within the eyewear sector, a competitive advantage that appears to be solidifying with each passing year. With minimal losses, founder Bansal seems confident in prioritizing growth, as profitability concerns no longer pose a major challenge for investors. The company’s leadership team has demonstrably delivered on its commitment to revolutionizing the eyewear market. As Lenskart seeks to establish a foothold in international markets with the promise of higher margins, the future appears bright. The company has a strong chance of becoming the next Indian decacorn (a startup valued at over $10 billion) as early as 2026-27.