Lenskart to attract half a billion dollar investment amidst the global slowdown in VC funds and massive layoffs!

When the big tech giants are laying off thousands of employees and dealing with a slowdown in VC investments, and other economic issues, Lenkart is in advanced discussions with Abu Dhabi Investment Authority (ADIA) to close a $500 million deal. This fundraising deal is to buy a mix of Lenskart's existing shares and new equity, according to the sources.

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Lenskart has revolutionized the eyewear industry by transforming the mundane act of wearing glasses into a fashion statement that combines style, comfort, and affordability. This 13-year-old omnichannel eyewear brand is one of the few startup unicorns in India that are profitable. This is the main reason why investors and venture capitalists are willing to back the startup with millions of dollars. In the latest development, Abu Dhabi Investment Authority (ADIA) is close to finalizing a deal to acquire a stake in Lenskart Solutions, for approximately $500 million, according to the people familiar with the matter.

The Middle Eastern sovereign wealth fund is currently in the process of finalizing a deal to purchase both new equity and existing shares of Lenskart. The sources have requested to remain unidentified as the information has not been made public yet.

With ADIA’s $500 million investment, Lenskart would be worth more than $4 billion.

ADIA (Abu Dhabi Investment Authority) and Lenskart are currently in the advanced stage of discussions; however, there is still a possibility that the terms of the agreement could change. Therefore, representatives from both ADIA and Lenskart are keeping tight lipped on the matter.

In the past, Lenskart had raised funds from KKR & Co, SoftBank Group Corp, Temasek Holdings Pte, and Premji Invest, among others.

Lenskart is in the process of concluding its fundraising round during a time when global economic uncertainty has resulted in massive job losses in the tech industry, slowed investment activity, and significant drops in the valuations of previously successful startups.

The tech sector in India has experienced more than 30,000 job losses in the past two years. Startups in India terminated the employment of almost 20,000 workers in FY22, and leading tech firms like TCS, Infosys, Wipro, and HCLTech have witnessed a significant decline in hiring trends. In the third quarter of FY23, these tech giants only hired 1,940 employees, a drop of 93% from the previous quarter, which is a concerning trend for job seekers.

Moreover, the trend of massive layoffs and a slowdown in the growth rate in the tech sector is not unique to India; it’s a global phenomenon. The past year has been particularly challenging for the tech industry worldwide, and the economic conditions have resulted in significant layoffs.

Lenskart funding rounds

Peyush Bansal, the CEO of Lenskart, co-founded the company in 2010. The company leverages technology and automation in its supply chain to sell glasses and contact lenses directly to consumers.

In July 2022, Lenskart secured $200 million in investment led by Alpha Wave Global, at a valuation of $4.5 billion. That was a tremendous increase of 80% YoY from July 2021, when the company raised $315 million at a valuation of $2.5 billion.

Another private equity firm ChrysCapital is in talks with Lenskart to invest around $100 million, according to media sources, in February 2023.

According to a Bloomberg News report, the company reached an agreement to acquire a majority stake in Japan’s Owndays Inc. for an estimated value of around $400 million.

In an interview with Bloomberg Television, Peyush Bansal stated that Lenskart is currently profitable and has plans to conduct an initial public offering (IPO) within the next 48 months.

Lenskart has been a game-changer in the eyewear industry, offering affordable and stylish options for consumers. The news of Abu Dhabi Investment Authority (ADIA) finalizing a transaction to purchase a share in Lenskart for approximately $500 million is a significant development for the company. With the value of Lenskart now above $4 billion, the deal marks the startup’s continued growth and success in a challenging economic climate. Although the details of the agreement are still under discussion, the potential for ADIA to become a shareholder in Lenskart is a positive sign for the company’s future.

SourceBloomberg

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