Abu Dhabi Investment Authority, a Middle Eastern sovereign wealth fund, is reportedly in advanced talks to acquire a stake in Indian eyewear retailer Lenskart for approximately $500 million. The investment firm is said to be concluding an agreement to purchase a combination of existing shares and new equity in Lenskart, with an announcement expected as early as this week. However, the details of the deal are still subject to change as the discussions are in advanced stages.
If the investment goes through, it would raise Lenskart's valuation to over $4 billion. This investment comes amidst a challenging investment environment, with declining valuations for many startups and continued layoffs across various sectors. The eyewear retailer had previously been in discussions with private equity firm ChrysCapital to raise $100 million.
Founded in 2010 by Peyush Bansal, Amit Chaudhary, and Sumeet Kapahi, Lenskart has created a portfolio of brands in the eyewear sector. The company reported a net loss of Rs 102.3 crore in FY22, compared to a net profit of Rs 29 crore the previous year, due to a significant increase in total expenses, according to regulatory filings.
Lenskart has raised over $900 million to date and is looking to go public in the next three years. The company is backed by prominent investment firms such as SoftBank Group Corp, KKR & Co, PremjiInvest, Temasek Holding Pte, and Alpha Wave Ventures. In June 2022, Lenskart acquired Japanese eyewear brand OWNDAYS for about $400 million, with the goal of expanding into Southeast Asian markets.
The potential acquisition by Abu Dhabi Investment Authority highlights the attractiveness of India's consumer market to international investors. The country's retail sector has seen significant growth in recent years, driven by a growing middle class with increasing purchasing power. With a population of over 1.3 billion, India represents a vast market for companies to tap into, particularly in the retail space.
In conclusion, the potential investment by Abu Dhabi Investment Authority in Lenskart reflects the strength of the Indian consumer market and the attractiveness of the eyewear retailer's portfolio of brands. The move could pave the way for further international investments in the Indian retail sector, which is poised for continued growth in the years to come.
