KKR escalates $300 million Lenskart funding at $2.5 billion valuation

Private equity group KKR is racing with a 250-300 million fund-raising round in omni-channel eyewear retailer Lenskart Solutions, doubling down on its investment bets in leading technology-backed and consumer-focussed companies.

The Softbank-backed unicorn is mainly raising secondary capital of 200-220 million at an assessment of about 2.3 billion, bountiful a bumper biased exit to prior investors such as IFC Washington, TR Capital, Chiratae Ventures and TPG Growth. The conclusion will make a six fold return in 4.5 years. The fund booster is expected to comprise 75-100 million of primary capital in the company at a 2.5 billion valuation to more capitalise its poise sheet for M&A and growth opportunities.

While KKR alone is looking to deploy $95-100 million, only via a secondary stake acquisition, Singapore’s investment company Temasek and Falcon Edge Capital, a New York-based hedge fund are the other investors set to join the 11-year-old retailer’s capitalisation table, said the people mentioned above. Avendus Capital is an advisor on the transaction.

Faridabad-headquartered Lenskart has escalated 459.6 million in funding over nine rounds from 12 investors, the last of which incorporated Kedaara Capital and Softbank Vision Fund II in 2019 at a 1.4 billion valuation, to fuel its extension in abroad markets such as Singapore and broaden its manufacturing footprint.

Lenskart was started in 2010 by Bansal, a McGill University engineering alumnus and former Microsoft employee, along with Amit Chaudhary and Sumeet Kapahi to source, assemble, manufacture, distribute and supply eyewear and other associated products including contact lenses.

“The capital-raising exercise will give it give enough dry power to deal with the ongoing flux in the market on account of the pandemic and make it fully prepared to pursue inorganic opportunities. Just before the current lockdown, the company was doing sales almost at pre-Covid levels. The second wave will impact its financials but the long-term growth opportunity and scale in the business is enormous,” said Venture Capital investor.

KKR is assembling the investment from its Asian private equity fund. Current technology-focused investments for the coup group in Asia include Adopt a Cow, a digitalised, direct-to-consumer dairy company in China; NetStars, the operator of Japan's largest QR code payment gateway; and Walnut Programming, children’s programming education company in China. In India, it has backed Reliance’s Jio Platforms as well as its retail arm with a total 2.25 billion investment in 2020. Temasek and Falcon Edge are leading backers of consumer tech startups in India ranging from Policybazar, Upgrad and Stanza Living among others.