Lenskart Buys Owndays Shares in Bid to Form an Amazon of Eyewear

Lenskart is buying a majority stake in Japan’s Owndays Inc. in a deal that will create one of Asia’s biggest online retailers of eyewear.

Lenskart will own a majority stake in Owndays but the deal is designed as a merger, the Indian company said. (Lenskart/Twitter)

Lenskart is buying a majority stake in Japan's Owndays Inc. in a deal that will create one of Asia's biggest online retailers of eyewear.

The Indian startup backed by SoftBank Group Corp. has agreed to buy Owndays shares held by L Catterton Asia, Mitsui & Co. and Principal Investments, the companies said in a statement. Owndays will then operate as a separate brand led by co-founders Shuji Tanaka and Take Umiyama, but target the premium segment while Lenskart focuses on the middle and mass market segments, they said.

Lenskart will own a majority stake in Owndays but the deal is designed as a merger, the Indian company said.

The move will create a retail giant with operations in more than a dozen markets from India and Japan to Southeast Asia. Lenskart, which uses technology and supply chain automation to directly sell eye wear to consumers, will lean on Owndays to expand its presence in physical retail.

“About 4.5 billion people globe-wide need to wear prescription glasses but only half of them do,” said Peyush Bansal, Lenskart's 38-year-old co-founder and chief executive officer.  He declined to comment on the size of the deal. “We are seeing a $50 billion to $100 billion opportunity and a real chance to build an Amazon for eye wear.” 

Lenskart should reach profitability when it hits $400 million in sales in the year ending March 2023, Bansal estimated. The companies project combined sales of $650 million by March 2023, he said. His startup, which was founded in 2010 and backed by Falcon Edge Capital, KKR & Co., Temasek Holdings Pte and PremjiInvest, grew 65% last year and is projected to surpass that this year, Bansal said on a video call.

Bansal graduated in engineering from McGill University in Montreal and worked at Microsoft Corp.'s headquarters before returning to India. He co-founded Lenskart Solutions Pvt in 2010 in the dusty, industrial town of Faridabad outside New Delhi with three others he met on LinkedIn.

It's since grown into the country's largest optical brand, shipping over 10 million pairs of eye wear annually, offering facial analysis-driven recommendations on its mobile app and home vision tests.

Tokyo-headquartered Owndays was founded in 1989, and opened its first overseas stores in 2013.  It currently operates 460 stores in a dozen countries besides Japan, selling over 2.5 million pairs of glasses annually. L Catterton and Mitsui acquired Owndays in November 2018 for an undisclosed sum. 

L Catterton was formed as a partnership between Catterton, luxury goods brand LVMH and Groupe Arnault. Its Asian arm had been mulling a sale of the Japanese chain for more than a year. At one point, Owndays's owners were in exclusive negotiations with private equity firms Longreach Group and Navis Capital, Bloomberg News has reported. 

In June, it sold $360 million worth of minority interests to accounts managed by Hamilton Lane and other institutional investors, a move that raised capital for the Asia unit to be redeployed in new investments.

A public listing for the newly enlarged Lenskart is at least 36 months away, Bansal said. The company is now building what it bills the world's largest eyewear manufacturing plant northwest of Delhi. The $150 million factory will ship 50 million pairs of eyewear annually, Bansal said, giving Lenskart a presence in the entire cycle from manufacturing to consumer sales.

“Digital transformation is the key to our next phase of growth in the post-pandemic operating environment,” Owndays co-founder Tanaka said in the announcement.