In an Indian e-commerce furniture space, a unique development, the omnichannel retailer of furniture in Mumbai, Pepperfry, is currently in the process of raising about ₹158.4 crore ($17.6 million) in an additional round of funding. This more recent capital raise is however at a much-adjusted value, which is referred to in the industry as a down round.
Morde Foods and SageOne Investments are now leading the round, which indicates the change in the investor profile of the company in its complex market consolidation and financial recalibration period.
Diverse investor participation and valuation impact
As per the regulatory filings obtained through the Registrar of Companies (RoC), the Pepperfry board had a resolution to issue more than 4 million equity shares at the issue price of ₹391 per share in January 2026. This price indicates the mood of the market and the internal re-adjustments that the company has experienced. Although Morde Foods and SageOne Investments are leading the round with contributions of ₹25 crore and ₹20 crore respectively, the financing has a relatively wide range of participants.
The round has received more than 50 various investors including institutional investors such as Newage Global Ventures and F3 advisors. High profile angel investors, including Indian cricketer Shreyas Iyer, among others, are also strengthening the cap table alongside people like Sidharth Iyer and Vikas Arora. It is reported that Pepperfry had already taken approximately ₹105 crore ($11.7 million) out of the entire allocated capital and the remaining was to be completed soon.
The most notable point in this finance is the implication on the post-allotment valuation of Pepperfry. It is estimated that the company will lose its valuation to the tune of 44% and its valuation will reduce to approximately ₹1,661 crore ($185 million). This is a drastic fall to the valuation of $330 million in its last bridge round of $5.1 million that took place in June 2025. This valuation reduction is indicative of an overall pattern in the category of so-called new-age Indian startups, which are emphasizing long-term sustainability and efficiency in their operations, rather than the stratospheric valuation attached to this sector in earlier years of uncontrollable growth.
On the financial front, the company has been directed at reducing its losses. Pepperfry experienced a reduction in operating revenue of 30% to ₹189 crore in the fiscal year ending March 2024 (FY24) but was able to reduce its losses by 37% to ₹117.5 crore. This $18 million round of capital will be strategically diverted to the business expansion, subsidiary operation, and general working capital requirements to ensure that the firm has the runway to stabilize the marketplace business model.
Operational focus
Since Pepperfry was launched in 2011, it has transformed into a strong omnichannel business in terms of growth, since it has been a pure-play online marketplace. The company has a database of more than 10,000 products, and it is operating on a system of over 200 Studio Pepperfry experience centres located in 100 cities. This new model of integrating an online shop with brick-and-mortar studios is at the core of its strategy to stay competitive with major-financed competitors such as Urban Ladder and Wooden Street.
The new capital will most probably be invested into further development of this omnichannel experience and its logistics infrastructure. The company is also planning to strengthen its own brands and expand its home decor line under the leadership of the CEO, Ashish Shah. Though this is a down round, this capital raise is a lifeline, which enables the brand to keep on with its mission of redefining the furniture-buying experience in India and head towards a more sustainable business model, eventually becoming profitable.
Conclusion
The move by Pepperfry to use an $18 million down round indicates the expediency that is in the need in the Indian startup ecosystem. The company is raising capital by acquiring financing through a combination of conventional food industry heavy-hitters, such as Morde Foods, investment groups, such as SageOne and celebrity investors, such as angels, which is ensuring that it has the capital to withstand current economic changes.
Although the decline in valuation is considerable, the main goal is obvious, and it is to strengthen fundamentals and guarantee long-term operating viability. Since the company will be implementing this new capital, the focus will most certainly remain on consolidating its market share and proving that its omnichannel marketplace can survive in a value-conscious retail environment.
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