Sleep Company aims to achieve annual recurring revenue of INR 500 crore and be profitable by FY25
 "Startup 'Sleep Company' hits Rs 500 crore annual recurring revenue")
Peerzada Abrar Bangalore
Sleep and seating solutions provider The Sleep Company (TSC) is targeting to be profitable by the end of FY25. Just four and a half years after its inception, the company announced that it has reached a significant milestone of achieving Annual Recurring Revenue (ARR) of Rs 5,000 crore.
The company said it has revolutionized the traditional mattress industry with 100 Coco (company-owned and operated) stores, proving it has first-mover advantage. The company said it has become the fastest D2C (direct-to-consumer) brand to achieve this feat in just two years since entering offline retail. The company opened its first store in Bengaluru in June 2022.
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“When we launched TSC in 2019, the mattress industry was fragmented, unorganized and dominated by distributors and dealers. We believe our omnichannel presence has revolutionized the industry,” said Harshil Sarot, co-founder, The Sleep Company. “After analysing consumer behaviour, we internally coined the term ‘Ropo’, which stands for ‘research online, buy offline’, meaning consumers research our products online, experience the products in-store and then buy. Our Coco stores help us provide a superior experience to our customers, ensure seamless delivery and address customer queries and challenges directly, helping us stand out in the market.”
Founded in 2019 by Priyanka Sarot and Harshil Sarot, TSC has announced that it has introduced smart grid technology into sleep and seating solutions. The company offers a range of products including mattresses, sofas, pillows, cushions, bedding, office chairs and smart reclining beds.
The company’s operating revenue has crossed Rs 1,271.4 crore in FY23, up significantly from Rs 7,405 crore in FY20. The Sleep Company said it is well positioned to reach the Rs 1,000 crore revenue mark in the next 2-3 years. This goal will be driven by a comprehensive growth strategy that includes expansion plans across India. To consolidate its market position and omnichannel presence, The Sleep Company plans to expand its employee base from the current 1,000 to 1,300-1,400 by the end of 2024.
“This rapid growth and expansion is due to a combination of innovative products and expanding omnichannel reach,” said Priyanka Sarot, co-founder of The Sleep Company. “We now aim to set new standards in the industry as we strengthen our position as a ‘house of brands’ and expand our product line. Integrating artificial intelligence (AI) into our future products will further enhance the customer experience.”
In December last year, the company secured Rs 1,840 crore in Series C funding from existing investors Premji Invest and Fireside Ventures. Prior to that, it had raised Rs 1,770 crore in a Series B funding round led by Premji Invest, Fireside Ventures and Arteria Capital and Rs 134 crore in a pre-Series A funding round.
The company has two manufacturing facilities, one each in Mumbai and Bangalore. It has been opening one store every four to five days since December 2022. All TSC stores have been EBITDA positive since their inception, the company said.
The company derives 85% of its sales from omnichannel presence, which includes retail stores and online through its own website. The company has witnessed a phenomenal 10x growth since the launch of its seating division and boasts the largest market share for office chairs in India. With its recently launched seating brand, ErgoSmart by The Sleep Company, the company aims to double its market share in the next 24 months.
