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Unit economics, scale, profitability and other classical principles of doing business take centre-stage for India Inc.’s GenNext leaders

- AJITA SHASHIDHAR

DIRECT-TO-CONSUMER home and sleep solutions company, Wakefit.co, recently raised ₹320 crore in its Series-D round led by private equity major Investcorp and existing investors Sequoia Capital India, Verlinvest and SIG. Despite registering a 30% yearon-year growth and being profitable, it was by far the most challenging round of fund-raising for the ₹810 crore company, says director and co-founder Chaitanya Ramalingegowda. “We raised Series A-B-C in three months, but Series D took us 6-7 months. Four funds took us to the investment committee, until Investcorp agreed to invest.”

The funding winter is getting the better of investors and entrepreneurs alike. Investors are wary of stories of revenue-less growth and are asking tough questions around unit economics, scale and profitability. Entrepreneurs are under pressure to jot down their deliverables quarter-onquarter as opposed to weaving fancy stories of where they see their businesses five years from now. “Despite registering a 30% growth there was skepticism about the depth of the market. Are we going to get the same profitability in newer categories as we have in the matured ones? Can you get to the scale where you will be profitable? Are you skilled to handle scale? We got severely questioned on these parameters,” says Ramalingegowda.