Duroflex, India’s leading sleep solutions company, and an existing portfolio company of Lighthouse Fund III, Limited (“Lighthouse”), has raised USD 56 million from Norwest Venture Partners, a leading Silicon Valley based venture capital fund.
In October 2018, Lighthouse invested USD 22 million in Duroflex. As part of the current funding round, Lighthouse has realized USD 21 million from a partial sale of its holding, and it continues to hold USD 44 million of equity in Duroflex. This partial exit represents a 3.0x gross return and 45% gross IRR in USD.
Established in 1963, Duroflex is India’s leading player in the mattress category. Duroflex follows a multi-brand strategy to reach out to various customer segments. It caters to the mass-premium customer segment through its omnichannel brand, ‘Duroflex’ and has an online-only brand, ‘Sleepyhead’, which caters to the digitally native millennials. Recently Duroflex has also entered adjacent categories such as bedroom accessories (e.g., mattress protectors, bed linen, comforters) and work-from-home furniture. Duroflex is also a strong B2B player, supplying foam and mattresses to marquee clients, including Ikea and Stanley, and actively pursuing export opportunities.
At the time of Lighthouse’s investment, Duroflex was a leading South Indian mattress player and aspired to grow nationally. The last three years have witnessed hyperbolic growth for the Company. Duroflex followed a multi-pronged strategy of expanding manufacturing capacity, transforming into an omni-channel player from an offline player, and launching innovative best-in-quality products supported by a consumer insights-based marketing campaign. Sales have nearly tripled since Lighthouse’s investment.
The Lighthouse team has worked closely with Duroflex to formulate and execute its omni-channel expansion strategy, evaluate and acquire manufacturing capacity, and enhance its marketing and brand-building. With this foundation in place, the Company plans to utilise the funds raised to further scale its brand nationally, set up company-owned experience centres across India, spend on marketing to create a formidable D2C brand and develop innovations in sleep technology.