Spacewood Furnishings is a leading modular furniture company based in Nagpur and is believed to be in its last stages of receiving a huge infusion of funds. A91 Partners, a Mumbai-based investment firm, will provide the company with ₹300 crore in capital. It is hoped that this huge acquisition will drive the expansion of Spacewood to become a strong force in the Indian modular furniture market that is currently on the rise. This investment is expected to place the Nagpur-based company at around ₹1,200 crore, as indicated by sources who are well conversant with the current discussions. The funding package will be designed in such a manner that it comprises both primary and secondary elements.

Growth and strategic expansion

Spacewood was established in 1996 by Kirit Joshi and Vivek Deshpande. Spacewood has already secured a strong presence in the expanding market of modular furniture in the country. The existing distribution network embraced by the company incorporates 35 exclusive retail outlets in over 20 cities and a strong network of over 500 dealers spread out in 150 cities within the country.

The next funding round is a strategically significant one for the ambitious expansion objectives of Spacewood. The company intends to utilize the capital to grow its physical stores, with the target being to open 100 exclusive stores in India. In addition to the expansion of the retail, the funds will be strategically deployed in a number of other areas. These involve increasing brand presence to reach a larger customer base, modernizing and advancing production, improving the business product line with new designs and products, and bringing talented individuals into the company who can help with large-scale operations.

Spacewood now has a giant manufacturing plant in Nagpur that covers more than one million square feet and is therefore one of the largest in the country. Besides making furniture in its name, the company also serves as a manufacturer to other major retailers in the industry, like Home Centre, Urban Ladder, and Home Town.

According to industry sources, Spacewood wants to realize a growth rate of 25-30% year in the next five years. The expansion of its exclusive stores and dealer network will be the main factor that will lead to this accelerated growth. The strategic core will continue to offer contemporary, personalized, and quality modular furniture products in both residential and office settings, as the increasing demand by urban consumers is for affordable, space-saving, and versatile designs.

Market and financial challenges

The road of Spacewood has been characterized by resilience, such as overcoming major challenges in operation and financial resources. The company also received a huge foreign investment a decade ago when Japanese building materials giant Sumitomo Forestry invested an estimated ₹90-₹100 crore in the company, owning 26%. This was a significant move during the era in which it was considered the first foreign direct investment by India in the furniture manufacturing industry.

The Indian furniture and home interiors business is at an active stage of consolidation and investor attention. The proposed funding by Spacewood follows other strategic moves in the industry, which include the acquisition of online furniture player Pepperfry by flexible workspace provider TCC Concept on a ₹659 crore share swap basis.

Pepperfry experienced a steep decline in revenues before the distress sale, as ₹272 crore in FY23 had dropped to ₹164 crore in FY25. HomeLane, an online interior design company, already acquired DesignCafe in a deal worth ₹3,000 crores in the form of a merger last year, and the resultant venture was subsequently funded at ₹225 crores by big funds such as WestBridge Capital, Hero Enterprise, and Claypond Capital, which once again reveals the investor interest in the sector.

Conclusion

Spacewood Furnishings will now embark on a new trajectory of rapid growth, which will be boosted by the ₹300 crore expected to be raised through A91 Partners funding. This massive capital injection worth approximately ₹1,200 crore is destined to be used in key investments in the expansion of the retail business, upgrading of the manufacturing, building of the brand, and acquiring talent. The operational resilience on which it is constructed, combined with a successful financial turnaround that has seen revenues increase to ₹600 crore in FY24, also means that Spacewood is poised to take advantage of the growing consumer demand for modular furniture.