Sep 27, 2021 · 53m · neon-show
How @Wakefit became a 700 crore revenue D2C brand ft. Founder, Ankit Garg | The Neon Show
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Wakefit co-founder Ankit Garg shares how the company bootstrapped into a 700-crore D2C home solutions powerhouse through customer obsession, vertical manufacturing, disruptive pricing, and strategic capital allocation.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Siddhartha holds 12.5% of the talking time here. How this is scored →
Siddhartha as informed peer 4.0 Guest teaching 3.4 Guest disagreement 1.7 Siddhartha pushing back 1.2
speaking balance: gold is Siddhartha, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 11:56 Direct premise correction on past startup model
Ankit directly rejects Siddhartha's premise that his earlier failed company made mattresses and taught him mattress economics, clarifying it was automotive foam.
Hardest push from Siddhartha ▶ 50:37 Pressing on differentiation in crowded marketplacesSiddhartha challenges Ankit's stance on distribution by pressing him on how a nascent brand can actually differentiate itself on crowded marketplaces like Amazon.
Biggest teaching moment ▶ 12:20 Structural difference between B2B and B2C dynamicsAnkit educates Siddhartha on why B2B demands strict technological differentiation to avoid commoditization, whereas B2C enables disruption across numerous operational levers.
Siddhartha holds their own ▶ 35:18 Citing exact online mattress market share dataSiddhartha demonstrates sharp sector knowledge by accurately quoting Wakefit's 40% online market share estimates and steering the discussion toward retail store unit economics.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Siddhartha as informed peer | Guest teaching | Guest disagreement | Siddhartha pushing back | Why |
|---|---|---|---|---|---|---|
| Early Entrepreneurial Failure and Rock Bottom | 3 | 1 | 1 | 0 | Siddhartha opens by inviting Ankit to talk about failure and rock bottom before founding Wakefit. Ankit delivers a lengthy narrative recounting his first failed foam manufacturing business, loss of capital, depression, and selling pasta to survive. | |
| Uncovering Industry Inefficiencies and Bootstrapping Wakefit | 3 | 4 | 2 | 1 | Siddhartha asks how Ankit identified the mattress problem and transitioned into Wakefit. Ankit explains discovering massive retail markups while shopping for a mattress and pushes back against conventional wisdom that founders must quit their jobs immediately without weekend experimentation. | |
| Contrasting B2B and D2C Business Models | 3 | 6 | 4 | 2 | Siddhartha assumes Ankit's first startup made mattress foam and provided costing insights, but Ankit corrects him twice, clarifying it was automotive seating. Ankit then educates the host on the strategic divergence between tech-differentiated B2B and multifaceted D2C value propositions. | |
| The Amazon Experiment and Transition to Manufacturing | 4 | 3 | 1 | 1 | Siddhartha cites an article about Wakefit's initial Amazon experiment and profit generation. Ankit details the open-costing model with contract manufacturers and the decision to set up in-house manufacturing to capture further margin. | |
| Customer Feedback Loops, Iterations, and Cost Efficiency Flywheel | 3 | 4 | 1 | 1 | Siddhartha asks how Wakefit learned distribution and marketing between 2015 and 2018. Ankit provides an extensive masterclass on customer feedback loops, fixing packaging, creating unscripted customer video testimonials, and passing factory cost savings back to customers. | |
| Revenue Trajectory and Portfolio Diversification | 5 | 2 | 1 | 1 | Siddhartha showcases familiarity with Wakefit's annual growth numbers and projected 700 crore run rate. Ankit confirms the mattress category share and explains their rationale for diversifying into furniture and home solutions to maintain triple-digit growth. | |
| Pitching Investors and Securing Sequoia Capital Funding | 4 | 3 | 2 | 1 | Siddhartha inquires about getting rejected by 31 investors before Sequoia invested in 2018. Ankit explains how Sequoia looked at core unit economics and business fundamentals rather than superficial TAM metrics. | |
| Zero-Marketing Scale, Amazon Reliance, and First Paid Ads | 5 | 3 | 1 | 1 | Siddhartha probes how Wakefit reached 21 crores organically, its online market share, and its offline store strategy. Ankit explains the 50/50 split between Amazon and D2C website and details the financial calculus comparing offline retail rent to digital CAC. | |
| The 100-Night Risk-Free Trial Policy | 4 | 3 | 1 | 1 | Siddhartha asks about the operational risks and origin of the 100-night trial policy. Ankit breaks down the psychological hurdle of ordering an unverified brand from Bangalore and how risk reversal built consumer trust. | |
| Co-Founder Equity Allocation and Angel Returns | 4 | 4 | 2 | 1 | Siddhartha asks about co-founder equity allocation frameworks and early angel returns. Ankit shares his framework that co-founder equity must solely reflect risk taken at entry time rather than perceived skill sets. | |
| The Rise and Evolution of the Indian D2C Ecosystem | 5 | 4 | 1 | 1 | Siddhartha queries why Indian D2C became an investor frenzy in 2020-2021 after years of scepticism. Ankit attributes this to public IPO benchmarks and marketplaces like Amazon and Flipkart acting as the true venture incubators. | |
| The Viral Sleep Internship Marketing Campaign | 5 | 4 | 3 | 3 | Siddhartha asks about the sleep internship campaign and pushes Ankit on how an early-stage brand can stand out among thousands on Amazon. Ankit firmly pushes back against early brand building, urging founders to solve core product issues first. |
Statements from this episode (26)
Ankit Garg launched Wakefit with just 18 lakh INR in capital
“I saved about eight, nine lakhs. I raised some seats for about five lakhs, and I took some money from the bank for about four. So, from 18 lakhs put together, I decided to invest in this business”
Ankit Garg decided never to build a B2B business again
“I decided from the first phase started that I am never going to build a B to B business in my life because it restricts you from having a very high technological differential capability.”
Garg: B2B is restricted to tech differentiation or commoditized cash flow
“In B to B business, you're just probably restricted to either running a cash flow business, Or a very technologically differentiated business versus a B to C where there are 10 or 15, 20 things that you can do to create anything anywhere.”
Incumbents charged ₹50,000 for memory foam mattresses costing ₹5,000 to manufacture
“They were selling memory foam matters at that point of time with a price of 40,050 thousand, you know, a king-sized mattress with a price of 50,000. Like, I was amazed. You know, how, how is it possible that, you know, I am selling the chemicals to them. I kno…”
Wakefit was likely the first brand to sell mattresses on Amazon India
“So I happened to be the first one probably who started mattresses on Amazon.”
Garg: Wakefit calls every customer after delivery to explain mattress care
“So I created a process where every product, once it is delivered to a customer, till today we call customers on telling them how to use the mattress and how to take care of them.”
Garg: Some Wakefit customer testimonial videos have 5 million views
“Today, I think some of the videos have some 50 lakh views.”
Garg: Lowering mattress prices drives Wakefit's volume and profitability flywheel
“We say that the moment we reduce the price, we become profitable. So it has always worked for us. Like we grow, we become profit. It's a cycle. Like you become more and more efficient as you keep on getting more and more customers.”
Wakefit grew revenue from 70 lakhs in 2015 to 23 crores in 2018
“I think in 2015 we did close to 70 lakhs 16 we did close to seven crores and 18 we did 23 crores.”
Wakefit's revenue scaled from 81 to 420 crore INR in two years
“In 19, we did 81 or 83. Then we did 200, and then we did four 20 last year.”
Wakefit is projected to hit 700 crore INR in annual revenue
“Yeah, we expected to hit about 700 crores.”
Mattresses account for close to 70% of Wakefit's revenue
“Mattress would be close to 70% of the business.”
31 VCs rejected Wakefit over superficial TAM before Sequoia invested
“Until then, 31 customers, it was mostly like, how big is the market? Can you become a billion dollar unicorn? Can you do this? Like, it was all superficial numbers. Like, everybody was looking at, can this become a billion dollar company or not, right? But I t…”
Garg: Wakefit was profitable, cashflow positive, and growing 3x before 2018 funding
“We were profitable by then. We were growing already and automatically we were growing three X, like with no extra points coming in. Business was, you know, full cashflow positive.”
Wakefit reached 21 crore INR in revenue with zero paid marketing
“Till we were doing this 21 close-up business, we had spent zero marketing. Like, there was no money involved. No Facebook, no Google, no Amazon, nothing. Like, it was going autopilot.”
Wakefit's early 21 crore revenue was split evenly between Amazon and website
“It was 50, 50% from Amazon and 50% from our website. It was mixed.”
Wakefit operates at 40% to 45% gross margins
“After that, we work at about we about 40 to 45% gross margins. I think raw material costs about 60%. So 40% of the money is what is used for logistics, returns, marketing, employees, everything. And GST also.”
Ankit Garg personally answered Wakefit sales calls for the first two years
“And I used to be the salesman in the beginning, like all the, my phone number was available on the website on Amazon. Like people used to call me literally for the first two years of this business.”
Co-founder equity should be based solely on risk taken, not skills
“Equity is in proportion to the risk of people. And it just can't be racist that this guy has got a lot of skills. This guy has got a lot of commitment. He's very smart. He's blah, blah, blah, blah, blah, right? It, equity just can't be related to anything othe…”
An early 2.5 lakh INR angel check in Wakefit returned 75 crores
“I have spent six years, 10 years not sleeping, so much of stress, but your 2.5 legs have become 75 crores.”
Indian D2C IPO multiples equal or beat SaaS and tech businesses
“Multipliers that people are getting when their IPOs are happening are also very, very equivalent or even better than SaaS or, you know, tech businesses.”
Amazon and Flipkart act as the true VCs for Indian D2C brands
“I think Amazon Flipkart are the true VCs. I would say they have created hundreds of entrepreneurs, like both, look at both, look at Wakefit, look at Mama, look at so many brands out there. Amazon has created those so many D to C brands, right?”
Wakefit's viral sleep internship campaign drove 200,000 applications and quadrupled traffic
“When we had gone live with this, we got about two, like, applications. Like, literally people came and filled the form. My traffic on the website went four X.”
Online marketplaces can scale early D2C brands to 1 crore monthly revenue
“I think online platforms, Facebook ads, Google ads, Amazon, Flipkart, they are more than capable. Could take you a crore rupees a month also without, without actually thinking about distribution.”
Early-stage D2C startups should ignore branding until they hit scale
“I think branding should be left until you hit a certain scale. I don't think branding comes in very handy when they're very, very small. All you should be solving is about the right product, the right prices, the right value that you will offer in that product…”
Amazon's algorithm guarantees initial test orders for any new seller
“Amazon algorithms are built in a way that, you know, any new seller comes, we'll definitely get at least some orders in the beginning to kind of test. I mean, they'll build the algo that everybody gets at least a chance to sell something.”