Startup Deep Dive : Wakefit — the mattress company that finally turned a profit the year investors stopped believing it

Wakefit spent nine years telling India it should buy a mattress it could not lie down on first, then took that mattress company public at an implied valuation of ₹6,400 crore (about $667 million at ₹96 to the dollar) in December 2025. Ten months later the same stock trades below its issue price, even though the company just booked its first full-year profit: ₹189 crore in FY26, after four straight years of losses.

That contradiction — a business that finally cracked profitability just as public investors turned lukewarm on it — is the story of Wakefit. It is also the story of a founder who once watched a ₹2,000 mattress get sold to him for ₹10,000, decided the entire retail layer in between was the problem, and built a factory-to-doorstep company to remove it.

Quick facts

What they do

Wakefit makes and sells mattresses, furniture and home furnishings — beds, sofas, study tables, wardrobes, cushions and the like — to Indian households, primarily online through its own website and app and, increasingly, through its own physical stores. It began as a single-product company selling foam mattresses that arrived compressed in a box, aimed at young, urban, price-conscious buyers who were comfortable ordering something they had never touched before. It has since broadened into a full home-furnishings catalogue and, since 2022, into brick-and-mortar retail, reaching buyers who still want to sit on a sofa before paying for it.

The origin

The founding insight came from an ordinary shopping trip. Around 2014-15, Ankit Garg went looking for a mattress and found that one costing roughly ₹2,000 to manufacture was being sold to him for about ₹10,000 — a markup he traced to the layers of distributors, dealers and showroom retailers sitting between the factory and the buyer. Garg tested the idea before building a company around it: in 2015 he bought a few hundred mattresses and listed them for sale on Amazon as an experiment, and the trial run turned a profit of about ₹60 lakh, enough to convince him the online, factory-direct model could work at scale.

He brought in Chaitanya Ramalingegowda as co-founder, and the two officially launched Wakefit in March 2016 out of Bengaluru. Because they were asking Indian shoppers to buy something as physical and personal as a mattress sight unseen, the founders built trust into the offer itself: a 100-night trial that let a buyer return the mattress for a full refund if they did not like it, an idea meant to substitute for the showroom experience they had cut out of the supply chain.

The struggle years

Wakefit’s growth was not a straight line. Three separate episodes came close to ending it.

The first was simply getting funded. The founders stayed bootstrapped for roughly three years, and early investor meetings were dismissive: the online mattress market itself was estimated at only about ₹50 crore around 2017, and investors repeatedly asked why anyone would buy a mattress online at all. Elevation Capital met the founders on 10 September 2017 and passed on investing, unconvinced the company’s advantages would hold once it moved beyond a niche online audience. Peak XV Partners (then Sequoia Capital India) is reported to have been roughly the company’s 43rd institutional pitch before it finally wrote a cheque.

The second was the furniture pivot. Having proved the mattress model, Wakefit tried to repeat it in furniture by opening a small engineered-wood factory — and found that a small, manually run plant could not beat the cost structure of the very unorganised competitors it was trying to undercut. Rather than retreat, the founders committed more than ₹100 crore of capital expenditure to build what they describe as India’s largest automated furniture factory. The bet required two years of cash burn before the new plant reached usable utilisation, and it forced the company through a down round in the process.

The third, and most severe, came in 2022-23. With the furniture capex still weighing on the balance sheet, Wakefit’s cash position fell to roughly one month of payroll. Leadership drew up contingency plans to cut founder salaries to zero and halve pay for the rest of the leadership team. Existing investors stepped in with a bridge, and within weeks the company closed a fresh round of funding that stabilised the business — a round that, going by Wakefit’s disclosed fundraising history, lines up with the ₹320 crore (about $45 million) raise led by Investcorp in January 2023, at a post-money valuation of roughly $303 million.

The turning point

If one event marks the moment Wakefit stopped being a single-product experiment and became a real company, it was the COVID-19 lockdown of March-April 2020. The initial shock hurt: nationwide lockdown froze logistics and shut the business down for weeks. But as restrictions eased and demand for home-office furniture and better sleep setups revived, Wakefit pushed forward a new “home solutions” line — sofas, study tables, bookshelves and similar categories — that it had been readying before the pandemic. Revenue for FY20 had been about ₹197 crore; by FY21 it had roughly doubled to about ₹410 crore, as homebound Indians who were shopping for the first time online for furniture, and not just mattresses, found their way to Wakefit. The pandemic did not create the furniture business, but it gave a fledgling category the demand shock it needed to become a second real revenue line rather than a side experiment.

The money behind it

Wakefit has raised roughly $105 million in primary funding across its life as a private company, from a small set of backers who each mattered at a different stage. Peak XV Partners (as Sequoia Capital India) was the earliest institutional investor after 2018 and stayed through the company’s growth phase, its holding sized at about 22.5% by the time of the IPO. Verlinvest, a Belgian consumer-focused growth investor, came in later and brought experience backing global consumer brands rather than pure e-commerce plays; it held about 9.8% at listing. Investcorp, a Bahrain-based alternative investment firm, led the January 2023 round of ₹320 crore that arrived in the immediate aftermath of the 2022-23 cash crunch — the round that, by the founders’ own account, kept the lights on.

Wakefit’s Draft Red Herring Prospectus, filed with SEBI in June 2025, initially proposed a fresh issue of about ₹468 crore plus an offer for sale. By the time the final Red Herring Prospectus priced the issue in December 2025, the structure had shifted to a fresh issue of about ₹377 crore and an offer for sale of 4.68 crore shares (about ₹912 crore) from existing shareholders, taking the total issue to roughly ₹1,289 crore at the ₹185-195 price band. The stock priced at ₹195, the top of the band, implying a valuation of about ₹6,400 crore. Peak XV was reported to be on course for close to a 10x return on its investment through the sale; later-stage backers Verlinvest, Investcorp and smaller shareholders faced a narrower 2x-3x outcome, reflecting how much later and at what price they had bought in.

How it makes money

Wakefit earns money the way the founding insight suggested it should: by owning manufacturing and selling straight to the customer, rather than sharing margin with a chain of distributors and retailers. The company runs five manufacturing facilities — two in Bengaluru, two in Hosur (Tamil Nadu) and one in Sonipat (Haryana) — that produce both mattresses and furniture using automated, largely imported machinery. It sells through its own website and app, its own company-owned, company-operated (COCO) retail stores, and a much larger network of roughly 2,250 multi-brand outlets and other third-party channels it does not own.

Materials remain the single largest cost: cost of materials consumed came to about ₹573 crore in FY25, roughly 43% of total expenses. Employee costs were about ₹166 crore in FY25, up 23% year-on-year as the company staffed up its new stores. Advertising and marketing spend has been reported at around 7.5% of revenue, low relative to many D2C peers, and gross margin has been rising gently — about 55% in FY25 and 55.8% in FY26 — as the company sells more through its own channels instead of discount-driven marketplaces.

The part most outside observers get wrong is treating Wakefit purely as an “online mattress” business enjoying a pure e-commerce cost advantage. In fact, the bigger margin lever now is the mix shift toward owned retail: a sale made through a Wakefit-run store or its own app captures the full retail margin, the same one a showroom used to keep, without paying a marketplace’s take rate or funding constant online discounting. That is also why the company is willing to spend ₹100-120 crore of fresh capital in FY27 on new stores even after nine years as a “digital-first” brand.

The numbers

The pattern is unusual: losses narrowed sharply from FY23 to FY24, widened again in FY25 as the company pushed into offline retail, and then flipped to a full-year profit in FY26. Wakefit was EBITDA-positive earlier than it was net-profit positive — EBITDA came to about ₹65 crore in FY24 and ₹59.5 crore in FY25 even while the company posted net losses in both years, largely because depreciation and interest on the new store and factory build-out sat below the EBITDA line. The FY26 net profit also benefited from a one-off deferred tax credit of about ₹98 crore taken in the March 2026 quarter; profit before tax for FY26 was a smaller, if still positive, ₹91 crore-odd figure once that non-cash item is set aside, which is a more conservative read of the underlying operating improvement. The most recent quarter on record, Q1 FY27 (April-June 2026), showed revenue of ₹404.9 crore, up 17% on the same quarter of FY26, with net profit of ₹23.4 crore and an operating EBITDA margin of 9.1%, up from 7.1% a year earlier.

Where the money comes from

Two splits stand out. By product, mattresses still generated 66% of revenue in Q1 FY27, with furniture and furnishings making up the remaining 34%. That is the quiet surprise in the Wakefit story: a company that spent years and a nine-figure capex bet diversifying beyond a single product, and rebranded itself around “home solutions,” still earns two-thirds of its money from the category it started with in 2016.

By channel, the bigger shift has already happened. Revenue from Wakefit’s own channels — its website, app and COCO stores — rose to 67.2% of total revenue in FY26, up from 57.0% in FY25. The remainder came through roughly 2,250 multi-brand outlets and other third-party retail spread across some 701 cities, a much wider footprint than the 76 cities where Wakefit runs its own 139 stores (as of March 2026). In other words, the brand many people still think of as an online-only D2C label now earns most of its revenue through channels it fully owns and controls, online and offline combined, rather than through marketplaces or resellers.

The risks

Three risks sit closest to the surface, and the company’s own disclosures point to each of them.

Retail expansion outrunning the balance sheet. Wakefit went from 125 COCO stores in September 2025 to 165 by June 2026, and plans roughly 80 more through FY27, funding much of it from IPO proceeds earmarked for new stores and lease costs. Every new store carries a fixed lease and staffing cost from day one, regardless of how quickly footfall builds — analysts covering the IPO flagged this aggressive store rollout, alongside margin volatility, as one of the clearer risks in the business, and the FY25 widening in losses has already been linked by trade press to the early cost of this shift into physical retail.

Manufacturing concentration. All five of Wakefit’s factories sit in just three states — Karnataka, Tamil Nadu and Haryana — and the company has already lived through one factory bet gone wrong, when an underpowered furniture plant forced two years of cash burn and a down round before a rebuilt, automated facility fixed the economics. A large share of current growth still depends on new capacity, imported machinery and stable power and labour conditions at a small number of sites.

Competing with organised incumbents on their own ground. As Wakefit moves from pure online sales into physical stores, it runs into players like Sheela Foam, which owns both Sleepwell and, since 2023, Kurl-on, and whose two brands together are estimated to hold close to 30% of India’s branded mattress market with far deeper distribution and balance-sheet scale. The online cost advantage that built Wakefit’s early growth matters less once the competition is a storefront next door rather than a showroom several steps removed from the factory.

The takeaway

The most instructive part of Wakefit’s history is not the mattress-in-a-box idea, which by now is a familiar D2C script. It is the decision, twice, to spend more money into a problem rather than retreat from it: doubling down on an automated furniture factory after the first attempt failed, and pushing into physical retail even while online margins were still comfortable. Both bets cost years of cash burn and, in the furniture case, a down round, before they paid off. The same instinct that rescued the company in 2022-23 — reinvest before the unit economics are fully proven — is exactly what public shareholders are now testing as Wakefit spends another ₹100-120 crore a year opening stores on a business that only turned its first annual profit in FY26. Conviction that survives one near-death experience is not proof it will survive the next one; it is simply the reason the company got a second chance to find out.

Frequently asked questions

What does Wakefit sell?

Wakefit sells mattresses, furniture and home furnishings such as sofas, beds, study tables and storage units, manufactured at its own factories and sold through its website, app and company-owned stores, as well as a wider network of multi-brand retail outlets.

When was Wakefit founded, and by whom?

Wakefit was founded in March 2016 in Bengaluru by Ankit Garg and Chaitanya Ramalingegowda, after Garg had tested the online mattress model with a self-funded Amazon selling experiment in 2015.

Is Wakefit profitable?

Wakefit posted a net profit of ₹189 crore for FY26 (year ended March 2026), its first full-year net profit after net losses in FY23, FY24 and FY25. Part of the FY26 figure reflects a one-off deferred tax credit, so the underlying operating improvement is smaller than the headline number, though still positive.

What happened in Wakefit’s IPO, and how has the stock performed since?

Wakefit priced its initial public offering at ₹195 a share, the top of its ₹185-195 band, listing on the NSE and BSE on 15 December 2025 at an implied valuation of about ₹6,400 crore. As of 18 September 2026, the stock traded at ₹145.39, with a market capitalisation of about ₹4,870 crore, below its issue-time valuation.

Where does most of Wakefit’s revenue come from?

By product, mattresses still account for about two-thirds of revenue, with furniture and furnishings making up the rest, as of the June 2026 quarter. By channel, Wakefit’s own website, app and stores generated 67.2% of FY26 revenue, more than the share coming from multi-brand outlets and other third-party retail.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Inc42, “Wakefit Trims Loss By 90% To INR 15 Cr In FY24” and related coverage, December 2024 — FY23 and FY24 revenue, net loss and EBITDA figures
• Entrackr, “Wakefit posts Rs 1,274 Cr revenue in FY25; losses widen,” November 2025 — FY25 revenue, net loss, EBITDA and cost breakdown
• IndiaRetailing, “Wakefit reports FY26 net profit of Rs 189 crore, revenue rises 17%,” September 2026 — FY26 revenue and net profit
• Screener.in, Wakefit Innovations Ltd company page, accessed September 2026 — FY23-FY26 revenue and profit history, current share price and market capitalisation
• Business Standard, “Wakefit Innovations reports standalone net profit of Rs 121.75 crore in the March 2026 quarter,” May 2026 — Q4 FY26 profit and deferred tax credit detail
• Entrackr, “Wakefit sets IPO band at Rs 185-195; Peak XV eyes 10X return,” December 2025 — IPO price band, implied valuation, shareholder offer-for-sale breakdown and investor return estimates
• Business Standard, “Wakefit Innovations share price, stocks list flat listing on BSE, NSE,” 15 December 2025 — IPO listing date and listing-day price
• Inc42, “Wakefit Q1 Profit Increases 19% YoY To ₹23.4 Cr, Revenue Crosses ₹400 Cr,” August 2026 — Q1 FY27 revenue, profit, EBITDA margin and mattress-furniture split
• Indian Retailer, “D2C Brand Wakefit Posts Strong Q1 FY27 Results Driven by Omnichannel Growth,” August 2026 — Q1 FY27 store count and FY27 capex plan
• Peak XV Partners, “From Idea to IPO: The Invisible Forces Behind the Wakefit Dream” (Insight), accessed September 2026 — founding narrative, investor rejections and the 2022-23 cash crunch
• Elevation Capital, “Wakefit’s Journey: Ambition, Reinvention, and the Hard Path” (Perspectives), accessed September 2026 — 2017 investor rejection, furniture-factory capex and down round
• YourStory, “D2C startup Wakefit revenue doubles in a pandemic year,” June 2021 — FY20 and FY21 revenue and the COVID-era pivot to home solutions
• Redseer, “How Redseer helped India’s largest D2C home furnishings brand by revenue in Fiscal 2024, Wakefit, file its DRHP,” December 2025 — market-position claim underlying the DRHP
• Inc42 company funding tracker, Wakefit, accessed September 2026 — total funding raised, investor list and January 2023 Investcorp-led round details
• Storyboard18, “Wakefit raises A&P spend to 7.5% of revenue as it doubles down on D2C, premiumisation and omnichannel growth,” 2025 — advertising and marketing spend as a share of revenue
• Upstox, “Wakefit IPO: Here’s how the company stacks up against Sheela Foam,” December 2025 — competitive positioning against Sheela Foam, Sleepwell and Kurl-on

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