According to media reports, home interior services startup DesignCafe is in the process of merging with its bigger rival HomeLane in a stock-swap deal.
The deal will value DesignCafe at about Rs 500 crore and HomeLane at about Rs 3,000 crore, reports added.
This development is likely bring about a consolidation in the home services industry amid a funding freeze in the technology industry over the past two years.
The two Bengaluru-based startups have a common investor in WestBridge Capital. HomeLane has raised a total of USD 115 million, while DesignCafe has raised USD 30 million.
After facing difficulties in raising a new round, DesignCafe is merging with HomeLane. The aim of this merger is to reach a combined Ebitda (earnings before interest, taxes, depreciation and amortisation) of about Rs 70 crore by March 2025.
DesignCafe is expected to operate as an independent brand after the merger. Both startups have faced challenges in scaling operations. Both have planned for a public offering in about two years. Additionally, they have also launched brands in the entry-level segment recently.
