HomeLane, a leading interior décor solutions provider, is set to acquire Design Café, its smaller rival, in a share swap deal while securing ₹225 crore in fresh funding from investors such as Hero Enterprise and WestBridge Capital. This merger will create a combined entity valued at approximately ₹3,000 crore, marking a significant consolidation in India’s growing home interiors market.

The newly formed company will focus on catering to a niche premium market, while maintaining distinct brands: HomeLane, Design Café, and HomeLane’s affordable interiors division, Doowup. This strategy aims to serve different customer segments effectively. The new funding is intended to fuel HomeLane’s expansion, particularly into tier 2 cities where demand for interior design solutions is on the rise.

In January, reports indicated that Design Café was exploring potential mergers with various companies, including HomeLane and Livspace. Sunil Kant Munjal, chairman of Hero Enterprise, expressed confidence in HomeLane’s business model, emphasizing the synergies expected from this partnership.

The combined entity plans to leverage a tech-driven approach, integrating Design Café’s design expertise with HomeLane’s operational strengths. Co-founders Tanuj Choudhry and Srikanth Iyer highlighted that the merger aims to achieve Ebitda profitability and generate revenue of ₹1,000 crore by 2024-25.

Currently, the combined revenue of HomeLane and Design Café stands at around ₹900 crore. Iyer noted the vast potential in India’s interior décor market, which is projected to reach $20 billion, driven largely by unorganized local players. HomeLane and Livspace are among the few firms that have scaled to significant revenue levels, benefiting from a resurgence in real estate activity as pandemic-era projects come to fruition.

Design Café, founded in 2016 by Gita Ramanan and Shezan Bhojani, has raised nearly $30 million to date from notable investors including WestBridge Capital and Sixth Sense Ventures. With its Qarpentri brand for mass home interior solutions, Design Café operates in 10 cities across India, further enriching the combined entity’s reach.

As the home interiors segment continues to evolve, this merger positions HomeLane and Design Café to deliver enhanced services and innovation, setting the stage for industry-leading performance.