Revival

At $33 million, Revival is undervalued for a company bringing in $11.1 million in 2022 net revenue. Most of the large incumbents in the carpets and rugs market, like Rugs USA and Ruggable, have estimated valuations in the hundreds of millions. Revival has plenty of room to grow within the massive global rugs market and create a return for investors who commit at the $33 million valuation cap.

The global carpets and rugs market stood at $82.1 billion in 2022. The market is expected to grow annually at a rate of 5.5% — so it’s not going to explode anytime soon. The market is hugely fragmented and there are a few household names (mostly home furnishing giants), but when it comes to big players, no singular brand sticks out. With a market this large, there is plenty of room for smaller startups to grow. Capturing just a fragment of an $82 billion market could leave room for a $33 million company to grow 5x, 7x, or 10x.

Revival was founded by experienced entrepreneurs Ben Hyman and Kurtuluş Korkmaz. In 2013, Ben was on the founding team at Brooklinen, a bed and bath linen company that raised $60 million in venture funding. Brooklinen remains privately held. Hyman left his role at the company to join Samsung as a strategy manager, where he met Kurt. Kurt launched Blueground, a rental furnishing company, in 2013. The company has amassed more than $256 million in funding and remains privately held. He continues to advise the company. The two have grown the Revival team to 35 members across the globe. 

An investment in Revival is an investment in two power founders. This duo knows how to scale a business and read market trends. Both have had incredible success as entrepreneurs in consumer goods and there are no concerns with their ability to execute with Revival.

There are not many ways to stick out in this massive and crowded market. Revival rugs are high quality with a range of contemporary designs, and customers rave about their purchases in reviews on the site. Offerings include both indoor and outdoor rugs, washable rugs, and upcycled one-of-a-kind textiles. But there are a number of high-quality rug makers out there. Producing a high-quality product is not enough to become a market leader. 

Revival is cheaper than big box retailers. An 8 x 10 wool rug from Pottery Barn or Crate & Barrel can cost thousands of dollars. Revival’s comparable rugs go for $689. Rugs USA, a discount rugs retailer, does offer a competing price. Of course, these rugs are not exactly the same and there will be some range with regard to size and material, but Revival remains on the cheaper end of the market. 

Revival can keep costs low by controlling much of the supply chain and working with an in-house design team, as well as 100-plus makers on the ground in India, Turkey, and Morocco. By working directly with weaving houses, the team can iterate on products quickly and provide additional quality assurance. By having team members on the ground abroad, Revival reduces overhead costs while keeping a strong 50% gross margin. In addition, the company’s global presence allows for a greater inventory. Revival offers up to 10,000 products at any given time. 

Revival offers a range of products from this large inventory, including washable rugs, one major trend in the current market. The upcycled rugs featured on the site could also draw in customers who want to feature something unique in their home. Revival tags the upcycled vintage rugs across the site that are one-of-a-kind, handpicked across India, Turkey, and Morocco. Few other retailers have such a comprehensive offering. 

Revival co-founder Ben Hyman expects to break even in 2023. He reported that the company is nearing profitability and expects net revenue to come in at more than $20 million for the year. 2022 net revenues stood around $11 million, so hitting more than $20 million this year would show impressive growth. The company is venture-backed and has more than $3 million in capital committed to date. Ben reported a $34,000 operating loss for February and around $700,000 in cash on hand. Gross margins are currently 50%. The company is in good financial standing and has plenty of runway as it closes out this raise. 

The rug market is not going to experience explosive growth anytime soon. And Revival faces plenty of competition in the market. There will likely never be a clear winner in the space, and it is hard to stand out in a meaningful way. It is unclear whether being at the lower end of the price spectrum and delivering on quality will be enough for Revival to stand out. 

An investment in Revival is an investment in the founding team. Ben Hyman and Kurt Korkmaz have stellar track records as founders and high-level managers. Both founders started and grew businesses and achieved millions in funding independently before Revival. If you are going to bet on a founding team in the consumer goods or home textiles space, this is the team to bet on. The rugs market is crowded, but this team knows how to sell their product. And the company’s early traction speaks for itself. Bringing in $11 million in net revenue for 2022 speaks to the duo’s ability to execute. At a $33 million valuation cap, Revival is arguably undervalued. 

Revival is led by a co-founder team with a stellar track record. Ben Hyman and Kurt Korkmaz have executed as entrepreneurs in the home goods sector before at Brooklinen and Blueground, respectively. The rug market is not going to see substantial growth in the future, but it is large and highly fragmented. There is room for a number of companies to grow. Revival does well to differentiate in a market that is hard to disrupt. By offering vintage, upcycled, and washable rugs, the company plays to several market trends and puts sustainability at the forefront while being affordable. With a $33 million valuation cap, investors who get in at this round could see strong returns. All of this makes Revival a Top Deal. 

Report written by Investment Research Manager Olivia Strobl on April 20, 2023.