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.