Lenskart: Complete Business Model Analysis
- surajit bhowmick
- Oct 12
- 11 min read
Lenskart is India’s leading tech-enabled, vertically integrated eyewear player with a scaled omni-channel model across India, Southeast Asia, Japan, and the Middle East. Founded in 2010 by Peyush Bansal (ex-Microsoft) with co-founders Amit Chaudhary and Sumeet Kapahi, the company addressed deep pain points in a fragmented optical market: limited access, inconsistent quality, high markups, and long delivery times.
IPO plans are in motion. Lenskart filed a Draft Red Herring Prospectus (DRHP) with SEBI on July 29, 2025, proposing a ₹2,150 crore fresh issue plus an OFS of up to 132.3 million shares; reported aims include a late-2025 listing and an aspirational valuation in the high-single-digit to ~$10 billion range depending on market conditions. So let's start Lenskart: Complete Business Model Analysis
Let’s drive deep into Lenskart: Complete Business Model Analysis
Topic Cover
Founder Story
Initial Struggle and Idea of Starting the Business
Lenskart Funding & Funding Analysis
Lenskart Financial Statement Analysis
IPO Overview (as of October 11, 2025)
SWOT Analysis
Conclusion
Founder Story
Lenskart was founded in 2010 by Peyush Bansal, joined by co-founders Amit Chaudhary and, later, Sumeet Kapahi. Bansal (born April 26, 1985) studied Electrical Engineering (IT, Control, Automation) at McGill University and worked as a Program Manager at Microsoft in the U.S. in 2007 before returning to India to build startups (SearchMyCampus; later Flyrr in the U.S.) under Valyoo Technologies, the parent entity that incubated Lenskart. In 2010, Bansal and Amit Chaudhary launched Lenskart as an online contact lens seller before adding prescription eyewear and sunglasses; Sumeet Kapahi, with prior experience at Luxottica/Ray-Ban India, joined in 2011 as the third co-founder to deepen category expertise.
How they met and formed the idea: Bansal’s early ventures under Valyoo tested multiple verticals (WatchKart, BagsKart, JewelsKart) before focusing on eyewear, where pain points were stark: price markups across intermediaries, long delivery times, lack of standardization, and limited access to optometry outside major cities. Interns were assigned to test the eyewear opportunity in 2010–2011; when IDG decided to back Lenskart, other verticals were shut down to concentrate on eyewear. The mission evolved from online convenience to solving access and accuracy end-to-end—diagnosis, prescription capture, lens cutting, fitment, and last-mile delivery.
Initial Struggle and Idea of Starting the Business
Market problem: Before 2010, India’s eyewear retail was largely unorganized, with fragmented supply, weak brand guarantees, inconsistent quality, and high markups passed through importers, distributors, and local opticians. Lead times for customized spectacles were long, prescription accuracy was variable, and access to optometry outside urban centers was limited. Customers lacked reliable warranties and returns; buying eyewear online suffered from trust deficits due to personalized prescriptions and fit.
Operational challenges (2010–2014): Selling prescription eyewear online required solving for precise refraction, pupillary distance capture, and custom lens edging. Early learnings showed barriers at each step—from collecting accurate power data to reducing cutting/edging errors and delivering a comfortable fit. Lenskart invested in German robotic cutting to target near-zero error tolerance, added AR-based virtual try-ons to mitigate style/fit uncertainty, and instituted a 14-day “no questions asked” policy to reduce buyer hesitation in a category that traditionally resists returns. At-home optometry was introduced to overcome access issues and convert testing into sales through a single funnel.
Supply chain pivots: The traditional chain—China-based manufacturers → importers → distributors → retailers—embedded markups and slowed delivery. Lenskart disintermediated the chain by controlling procurement and building in-house assembly and lens labs; vertical integration improved quality control, delivery SLAs, and margin structure. Later, automation and robotics (Bhiwadi) and a new Hyderabad mega-factory further strengthened speed and cost-to-serve.
Omni-channel and offline expansion: Indian buyers wanted touch-and-feel, post-sale adjustments, and trust assurance. Lenskart opened its first Delhi store in 2013, quickly scaling stores with a mix of company-owned (COCO) and franchise (FOFO) formats while maintaining centralized lens manufacturing and fulfillment to retain quality and speed. The store network became a key acquisition and service asset alongside online.
Turning points and experiments:
2013: Launch of Lenskart@Home and home trials to collapse the friction of prescriptions and style selection.
2016–2018: Rollout of 3D/AR try-ons; institutional funding to scale offline; integration of private labels (Vincent Chase, Lenskart Air) and premium (John Jacobs) to widen price ladders and improve gross margins.
2022: Majority stake in Owndays (Japan), expanding to 13 markets and learning from matured Asian eyewear retail to enhance productivity and assortment at home.
Ongoing challenges included integrating FOFO with COCO without channel conflict, managing trust via accurate prescriptions/fit, and balancing rapid store growth with supply-chain complexity. Franchise dissent and legal friction in Karnataka in 2024–2025 highlights the governance and alignment risks in mixed models; investigations were stayed by the High Court in January 2025, but underscore operational sensitivity.
Lenskart Funding & Funding Analysis
Fundraising pattern and dilution implications:
Round sizes scaled with proof points: pre-2016 (tens of $M), 2019 (nine-figure), 2021–2024 (multiple large checks with rising secondary), suggesting progressively lower primary capital needs as unit economics improved and capex cycles were funded earlier. The high share of secondaries in 2023–2024 redistributed ownership without significant dilution of founders/employees, while adding public-leaning institutions to the cap table—a constructive pre-IPO pattern.
Capital allocation: tech stack (AR/3D try-on, automation), centralized lens labs (Bhiwadi), store rollout (COCO/FOFO), brand building (John Jacobs), and M&A (Owndays; minority bets via Neso Brands). New Hyderabad facility signals continued manufacturing integration to reduce China-linked vulnerabilities and improve throughput.
Back-of-the-envelope valuation multiples (illustrative):
June 2024 secondary at $5B vs FY24 revenue ₹5,428 crore (~$651M at ₹83.5/USD) implies EV/Sales ~7.7x on trailing FY24; vs FY25 revenue ₹6,653 crore (~$797M) implies ~6.3x on a forward-like basis. By November 2024, Fidelity marked to $5.6B (implied ~8.6x FY24, ~7.0x FY25), later reports of $6B would be ~9.2x FY24 and ~7.5x FY25 sales (simple crossings; currency/definitions vary). Premium reflects growth, vertical integration, and international optionality compared to traditional retail comps.
Secondary transactions and ESOP liquidity:
2023–2024 saw ~$650–800M secondaries across ADIA, ChrysCapital, Temasek, and Fidelity, enabling partial exits for SoftBank, Chiratae, Premji Invest, Kedaara, and others; among the largest late-stage secondaries in India in this period. ESOP liquidity was supported implicitly via these rounds; DRHP will detail ESOP pools and vesting outcomes.
Financial Statement Short Summary
Lenskart Financial Statement Analysis
Lenskart Income Statement Analysis
Revenue Performance
Lenskart's revenue trajectory showcases consistent growth momentum across all business segments. Operating revenue grew from ₹3,788 crores in FY23 to ₹6,653 crores in FY25, representing a robust compound annual growth rate of 32%. The revenue composition reflects a well-diversified business model:
Sale of Goods (95.61% of revenue): ₹6,360 crores in FY25, growing 23% year-over-year, primarily driven by prescription eyeglasses, sunglasses, contact lenses, and accessories.
Sale of Services (1.98% of revenue): ₹133 crores in FY25, growing 27% year-over-year, supported by membership programs, home eye check-ups, and training services.
Other Operating Income (2.41% of revenue): ₹160 crores, including lease income, website licensing fees from franchisees, and scrap sales.
Geographically, the revenue split demonstrates successful international expansion with India contributing ₹4,015 crores (60%) and international markets contributing ₹2,638 crores (40%) in FY25. The international segment grew 17% while India grew 27%, indicating strong domestic momentum alongside international scaling.
Profitability Analysis: The most striking aspect of Lenskart's financial performance is its profitability turnaround. The company achieved its first full-year consolidated profit of ₹297 crores in FY25, marking a dramatic improvement from a ₹10 crore loss in FY24 and ₹64 crore loss in FY23.
EBITDA Performance: EBITDA excluding other income expanded significantly from ₹260 crores (6.86% margin) in FY23 to ₹971 crores (14.60% margin) in FY25, demonstrating strong operational leverage as the business scaled. This expansion reflects improved cost management, economies of scale in manufacturing, and operational efficiency gains from automation.
Net Profit Margins: PAT margins improved from -1.68% in FY23 to +4.47% in FY25, indicating the company has crossed the profitability inflection point and is generating sustainable returns.
Cost Structure Analysis: Lenskart's expense management shows disciplined cost control while scaling operations. Total expenses grew from ₹4,029 crores in FY23 to ₹6,619 crores in FY25, but at a slower pace than revenue growth, resulting in operating leverage.
Major Cost Components (FY25):
Raw Materials & Components: ₹1,760 crores (24.52% of total expenses), representing the largest cost bucket due to lens manufacturing and frame procurement
Employee Benefits: ₹1,379 crores (19.7% of total expenses), growing 27% from FY24 but stable as a percentage of revenue, reflecting controlled headcount expansion alongside business growth.
Other Expenses: ₹2,164 crores, including marketing, commission to selling agents, rent, and operational costs.
Depreciation & Amortization: ₹797 crores, reflecting significant capex investments in manufacturing automation and store buildouts.
The cost structure reveals a vertically integrated model with direct procurement keeping material costs competitive, while employee costs remain proportionate to the customer-facing retail nature of the business.
Lenskart Balance Sheet Analysis
Asset Structure
Lenskart's balance sheet reflects an asset-heavy business model driven by manufacturing infrastructure, retail network expansion, and working capital requirements.
Fixed Assets (FY25):
Property, Plant & Equipment: ₹1,340 crores (vs ₹945 crores in FY24), representing investments in manufacturing facilities, including the Bhiwadi automated plant and new Hyderabad facility.
Goodwill: ₹1,876 crores, largely from acquisitions, including the majority stake in Japan's Owndays.
Right-to-Use Assets: ₹2,109 crores (vs ₹814 crores in FY24), reflecting significant lease obligations from rapid store expansion across India and international markets.
Intangible Assets: ₹907 crores, including technology platforms, brand value, and software systems.
Current Assets (FY25):
Inventories: ₹1,081 crores (vs ₹688 crores in FY24), supporting business growth with 75% centralized at manufacturing facilities for efficiency.
Cash & Cash Equivalents: ₹654 crores (vs ₹220 crores in FY24), providing strong liquidity for expansion and operations
Liability and Equity Structure
Shareholders' Equity: Net worth increased to ₹6,099 crores in FY25 from ₹5,698 crores in FY24, with equity share capital of ₹35 crores and reserves of ₹6,064 crores, reflecting retained earnings and investor contributions.: Total borrowings decreased to ₹134 crores in FY25 from ₹229 crores in FY24, indicating deleveraging and strong cash generation. The debt-to-equity ratio improved dramatically from 0.26 in FY23 to just 0.06 in FY25, showcasing a very conservative financial structure.
Lease Liabilities: ₹526 crores, representing obligations for store leases across 2,723 locations globally.
Working Capital Management
Working capital efficiency has improved significantly, with net working capital days reducing from 30.35 days in FY23 to 25.64 days in FY25. This improvement reflects:
Better inventory turnover through centralized supply chain management
Optimized procurement cycles with supplier payment terms
Faster collection cycles from retail and online sales
Lenskart Cash Flow Analysis
Operating Cash Flow
Lenskart demonstrates strong and improving cash generation from operations. Net cash from operating activities surged from ₹95 crores in FY23 to ₹1,231 crores in FY25, reflecting the company's transition to profitability and efficient working capital management.
The substantial improvement in operating cash flow is driven by:
Higher profitability with ₹297 crores PAT in FY25
Non-cash charges of ₹797 crores in depreciation and amortization
Improved working capital management, reducing cash conversion cycle
Better inventory turnover and supplier payment optimization
Investing Cash Flow
Net cash used in investing activities was ₹266 crores in FY25 (vs ₹298 crores outflow in FY23), primarily reflecting:
Capex investments in manufacturing automation and new facility construction
Store expansion across India and international markets
Technology platform upgrades and digital infrastructure
Strategic acquisitions, including Owndays integration
The controlled investing outflow despite significant expansion indicates disciplined capital allocation and focus on ROI-positive investments.
Financing Cash Flow
Net cash outflow from financing activities was ₹535 crores in FY25, including:
Debt repayments of ₹191 crores, supporting the deleveraging strategy
Principal lease payments of ₹469 crores from store network obligations
Interest payments on borrowings and leases
Share issuance proceeds of ₹160 crores from investor rounds
The net financing outflow reflects the company's reduced reliance on external financing as operational cash flow strengthens.
Net Cash Position
Closing cash and cash equivalents increased to ₹654 crores in FY25 from ₹220 crores in FY24, providing strong liquidity for expansion and unforeseen contingencies. This cash position, equivalent to about 3.5 months of expenses, offers substantial financial flexibility for IPO execution and continued growth investments.
IPO Overview (as of October 11, 2025)
Lenskart Solutions Limited filed its Draft Red Herring Prospectus (DRHP) with SEBI on July 29, 2025. The draft contemplates a fresh issue of ₹2,150 crore and an Offer for Sale (OFS) of up to 132.3 million shares by current investors and certain founders. Proposed listing is on NSE and BSE. Media and broker notes indicate expected listing in late 2025, subject to SEBI approval and market windows.
Offer structure and use of proceeds: According to coverage of the draft, net proceeds from the fresh issue are earmarked for opening COCO stores in India, lease/rent/license payments, technology and cloud infrastructure, brand marketing/promotion, potential inorganic acquisitions, and general corporate purposes. DRHP-era reporting suggests book runners include Kotak Mahindra Capital, Morgan Stanley, Avendus, Citi, Axis, and others (final syndicate per RHP). Registrar referenced as MUFG Intime India in some summaries.
OFS sellers and investor exits: OFS participants reported include SVF II Lightbulb (SoftBank), Schroders Capital PE Asia, Premji Invest’s PI Opportunities Fund II, Temasek’s MacRitchie, Kedaara Capital Fund II LLP, Alpha Wave Ventures LP, and partial sales by founders Peyush Bansal, Neha Bansal, Amit Chaudhary, and Sumeet Kapahi. Illustrative exit multiples discussed in media reflect low-double-digit MOICs for earliest entries and lower multiples for later-stage investors, pending final IPO pricing.
Valuation and size: Commentary across Economic Times, Moneycontrol, Kotak, and broker blogs suggests ambitions for a high-single-digit to $10 billion valuation at IPO, contingent on markets. A $2,150 crore primary (plus OFS) would place float size near ₹7,500–₹8,000 crore in some speculative reports; actual band and size will be fixed in the RHP. As of October 11, 2025, price band and dates were not officially disclosed in public media tracked here.
Investor reception and implications: Late-stage secondaries in 2023–2024 at $4.5–5.0 billion and Fidelity’s mark-up to $5.6 billion in late 2024 set reference points ahead of the IPO. A $8–10 billion IPO valuation would imply a premium to these prints, justified by FY25 profitability (~₹297 crore), ~22–23% FY25 revenue growth, and maturing international operations, but tempered by capital intensity and execution complexity. A successful listing may broaden governance, provide fresh capex currency for Hyderabad/SEA expansion, and rationalize ownership concentration through public float.
Note: For definitive details (price band, anchors, final use of proceeds, allocation), rely on the DRHP/RHP and SEBI/exchange filings at the time of issue.
SWOT Analysis
Strengths
Vertically integrated supply chain and manufacturing enable cost control, speed, and quality at scale; Bhiwadi’s automated facility and Hyderabad megaproject strengthen throughput and reduce dependence on intermediaries.
Proven omni-channel model blending online convenience, AR try-on, home optometry, and offline stores for fitting/service; a key wedge in a trust-sensitive category.
Strong brand portfolio and private labels (Vincent Chase, Lenskart Air, John Jacobs) lift margins and allow segmentation; Owndays adds premium positioning and SEA/Japan coverage.
Data/tech capabilities (virtual try-on, AI-led recommendations, centralized labs) reduced returns and improved conversion; ability to innovate retail footfall and assortment.
Scale leadership in India and growing international footprint; per-store productivity outside India higher, diversifying revenue bases.
Weaknesses
Capital intensity of network scale-up and manufacturing; payback periods depend on sustained footfall and execution; FOFO/COCO mix introduces governance/relationship complexity.
Gross margin pressures possible with premium brand expansion and international competition; balancing price perception with quality and speed is ongoing.
Operational complexity in custom prescriptions (made-to-order, fitment), requiring skilled optometry and tight QA; defects can erode trust at scale.
Legal and franchise-owner tensions (e.g., Karnataka FIR in 2024; High Court stay in Jan 2025) highlight FOFO risk; brand must maintain partner alignment.
Opportunities
Large TAM/SAM in India: organized share of prescription eyewear remains low; scope to grow store density and online penetration with rising awareness and incomes.
International expansion in SEA, Middle East, Japan via Owndays; higher ARPU and currency tailwinds improve unit economics; DRHP coverage suggests fast-rising international contribution.
New categories and services: contact lenses, coatings/blue light, tele-optometry, IoT/smart eyewear; B2B partnerships and insurance adjacency could deepen wallet share.
Supply chain localization and automation (Hyderabad) to de-risk China exposure and improve margins/speed; scope for export hubs in India.
Threats
Competition from Titan Eye+, Specsmakers, GKB Opticals, Vision Express, and global brands/marketplaces; price wars and promotions may compress margins.
Geopolitical/supply-chain risk due to China linkages (historically a significant import share); while localization grows, transition risk persists.
Regulatory/consumer protection scrutiny in healthcare-adjacent retail; accuracy, returns, and data privacy standards can tighten, raising costs.
Execution risk in multi-country rollout and dual-brand architecture (Lenskart/Owndays); missteps in positioning or localization could affect productivity.
Conclusion
Lenskart has evolved from online contact lenses into a full-stack eyewear platform with national and international scale. The strategic playbook, vertical integration, omni-channel service innovation, tech-enabled prescription accuracy, and brand architecture created a category leader in an underpenetrated market. The financial trajectory shows rapid top-line growth and a pivot to profitability in FY25, making the public markets a logical next step.