Livspace: A Designed Unicorn

One does not stumble upon an out-of-the-box venture idea that has its fingers on the right business pulse. Not at least by default.

So, when in February 2022, Livspace, a start-up, turned unicorn with $1.2 billion in valuation, it had stacked up more than 10 years of effort, dogged tenacity and a roller coaster journey behind it.

Now, Livspace, one of Asia’s largest omni-channel home interior and renovation platforms, is present in India and Singapore. It has also stepped into West Asia through a joint venture with Saudi Arabian,  Alsulaiman Group.  

The build-up on an idea

Livspace’s proprietary technology platform connects home-owners to designers, and a host of third-party service providers and product sellers.

Though the start-up company was incorporated in 2012, in 2015 it fired up a three-pronged aggressive strategy geared towards fast lane traction. Each of the three co-founders took charge of key areas by pooling in their professional expertise.  

Anuj Srivastava, a former Google executive who had product leadership roles in creating Google Maps, Google Commerce and Google Ads, as the founder CEO of Livspace took up the responsibilities of fundraising, operations of the Singapore unit, and coordination of all activities of the company.

In December 2014, Livspace raised $ 4.6 million and in August 2015 $ 8 million. On both occasions, Anuj’s elder brother Anurag’s Jungle Venture, Rahul Chowdhri-led Helion Venture Partners, Gokul Rajaram’s Block and Akash Goel and Vishal Gupta’s Bessemer Venture Partners participated.

In partnership with IKEA, the global furniture and homeware major, Livspace took deeper roots in Singapore and also spread its service wings into Malaysia. IKEA was also instrumental in bringing together Livspace and Alsuliman Group, IKEA’s operational partner in Saudi Arabia and the West Asian region. As a matter of fact, Ingka Venture, an investment arm of Ikea, is an investor in Livspace.

Livspace’s COO Ramakant Sharma, former Vice President (Engineering) at Myntra, second Co-Founder, simultaneously spearheaded three acquisitions in India, which created an operational base for the company in Bengaluru and the later expansion into other cities.
 

Acquisition Strategy to Grow

In March 2015, Livspace took into its fold Design-Up, a marketplace of designing fraternity in Bengaluru. Barely a couple of months later, Livespce took control of Dwill, a network of designers.

With these acquisitions Livspace built a thriving design community of both designers and homeowners. It is believed that Anuj’s sister-in-law and the third Co-founder, Shagufta Anurag, an architect and interior designer herself, was instrumental in Livspace bringing about an alliance with the dynamic designer community.

YoFloor, a mobile and virtual reality platform that helped homeowners visualize designs and arrive at their personalised choices, was acquired in the same year.

Yo-Floor lent Livspace capabilities to let its homeowner clients see through 3D visualisation technologies a prospective design for their homes, even before any action on the property. It also made Livspace an owner of a proprietary technology platform for a start.

In December 2021, Livspace acquired a majority stake in Qanvast, a similar start-up which had operations in Singapore, Malaysia and Hong Kong in almost the same business space. However, unlike other acquisitions, the activities of Qanvast were kept running independently and separately. The collaboration between the two entities is now limited to sharing of expertise and network.

 Livespace’s latest funding round (series F), led by KKR, brought in $180 million, and valued the enterprise at over magical $ 1 billion. But before that Livspace reportedly was making operational profits. Though the sheer weight of funding, some $ 450 million, powered its growth, the inner workings of the start-up and complementarity of the founders sustained it so far.

The Growth Path Ahead 
 

Livspace PTE Limited, the Singapore headquartered holding company, and its wholly-owned Indian subsidiary, Home Interior Design E-commerce Private Ltd, located in Bengaluru, have proved to be steady corporate and legal vehicles for the start-up.

Behind this was an uncluttered thought process for choosing a relatively secure pathway for the future of the organisation.

After amendment in India- Mauritius double tax avoidance treaty in 2017, it was felt more strongly than ever before. According to a Standard Chartered 2020 survey, about 1,600 Indian start ups were looking to create holding companies or investment vehicles in Singapore.

But back in 2012, there were not many who could visualise the potential of fundraising advantages as well as favourable tax, investment and legal regime at play in the city-state for Indian ventures, thanks to a comprehensive business treaty between the two countries. Apart from this, the long-term value protection of its intellectual property through holding the asset in a Singapore company is a better option for any geography-specific licensing.

 The Company has foreseen the benefits having clear access to the Indian market and its talent pool through corporate structure. Today, Livspace’s Indian operation contributes 79 percent to its revenue basket.

Going by the trend, Livspace’s next ports of call would be a few more Asia-Pacific region cities and deeper access in India. It is a little early to predict when Livspace will fund big time its own growth momentum. But a close follower can sense that it may be round the next corner.