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Four years ago, Shubhra Chadda and her husband Vivek Prabhakar sold their three-bedroom apartment in Bangalore and raised money to start selling refrigerator magnets, bags, apparel and other bric-a-brac under their new business, Chumbak Design. Their ‘India-inspired’ everyday products—designed with a quirky desi twist—have garnered a loyal following in quick time.
Chumbak, which had raised $2 million in Series A funding from venture capital firm Seedfund in 2012, recieved Series B funding in May 2014 from private equity firm Matrix Partners, as well as another round of investment from Seedfund. The founders plan to strengthen the startup’s ecommerce division, and more than quadruple their existing retail presence. They will not only expand the company’s footprint in Bangalore and other Indian cities, but also go to international markets.
Currently, it has 21 exclusive outlets in 16 Indian cities including Mumbai, Delhi and Chennai, and its products retail at about 60 multi-brand stores. Prabhakar (36) and Chadda (34) plan to set up another 50-60 outlets, including kiosks—small-format stores up to 200 sq ft in size—this fiscal year. The kiosks and stores vary in size from 150 sq ft (when Chumbak’s first outlet opened at Forum Mall in Bangalore) to 250 sq ft in Pune’s Phoenix Market City. It also has an 800-1,000 sq ft outlet at New Delhi airport’s T3 terminal, and will soon be opening a 2,600 sq ft-store in Bangalore.
“The success so far has given us the confidence to expand,” says Prabhakar, Chumbak’s co-founder and CEO. He says the company has grown 300 percent in 2013-14, and expects sales to rise as much in the current fiscal too. Though Prabhakar declines to share numbers, an industry expert reckons that Chumbak clocked in revenues of close to Rs 50 crore in 2013-14. The company has set itself a sales target of Rs 400 crore in the next three years.
“The startup is representative of an emerging new India, one that is neither afraid to take on the world nor make fun of itself,” says Bharati Jacob, co-founder and partner at Seedfund. And its promoters and investors believe that Chumbak’s products will be equally popular across the world.
The company already sells in about a 100 stores in kitsch-loving Japan through a partnership with Japanese handicrafts distributor Amina Collection. It also exports to the US, the UK, Australia and the Middle East, including the Virgin Megastore in Dubai, where Chumbak’s phone and laptop cases are available. It has also begun talks with various “big-box retailers” such as Anthropologie and Pier 1 Imports in the US to include its India-themed souvenirs in categories like home decor and apparel.
Some of Chumbak’s most popular items include an iPhone case with a motif of the ubiquitous Indian autorickshaw, and coffee mugs imprinted with daaru (liquor) bottles of all shapes, sizes and colours.
Chumbak’s unique designs have found favour with PE investors and VC funds. “It’s rare to find entrepreneurs who bring together both business-savviness and design expertise, which is needed in spades,” says Rishi Navani, co-founder and managing director of Matrix Partners. Both Chumbak and Matrix declined to quantify the funding, but Navani says, “typically, for companies at the stage in which Chumbak is in, we invest $5-10 million”.
Prabhakar says the money will help them execute their plan “for the next 36 months”. An important part of his strategy is to build a strong technology backend and find ways to double the online share of revenue, which currently stands at 12-15 percent, while the rest comes from brick-and-mortar sales. That is going to change: A chief technology officer is in the process of being hired, and the IT backend is getting consolidated; a “brand new website” is also in the works.
Through this expansion process, Prabhakar and Chadda will continue to focus on the design of their products, which is the backbone of Chumbak’s success. “I didn’t study design, and it’s one of my big regrets. It’s something I keep telling my mother,” says co-founder Chadda who heads product and design at the company. In the past, she has worked in communications and PR at NetApp (a data storage and cloud computing company) and Nortel (a telecommunications firm). “Now, I sit with the designers [at Chumbak] mostly in awe of what they do, but I’ve developed a strong sense of what will work and what won’t,” she says.
(This article is excerpted from the latest Forbes India 05 September, 2014 issue which is now available at news stands and book stores. You can buy our tablet version from Magzter.com)