Online beauty retailer Nykaa raises Rs 75 Cr funding

Online beauty retailer Nykaa has raised ₹75 crore (above $11 million) in its latest round of funding, valuing the six-year-old company at ₹3,000 crore, according to three people familiar with the development.
 
The fundraising was part of a ₹170 crore investment round, which was a mix of primary and secondary transactions that brought in about ₹95 crore to some existing shareholders.
Existing investors including Sunil Munjal’s family office, consumer goods maker Marico’s Mariwala family office and Dalip Pathak, special limited partner at private equity firm Warburg Pincus, led the investment round, along with other existing and new high net worth individuals.
 
This is the fourth round of fund-raising by Nykaa, which last raised about ₹100 crore in 2016 from Max India, the Sunil Munjal family office and Harsh Mariwala.
 
With this, the total capital raised by the firm stands at about ₹255 crore. This investment comes almost four months after Nykaa sought to initially raise between ₹250 crore and ₹300 crore at a valuation of ₹3,000 crore, according to one person.
 
“The reason to settle for a smaller primary component has been Nykaa’s insistence on maintaining the valuation at ₹3,000 crore. However, their operational Ebitda performance has been strong enough to help them command the valuation and enable investor interest,” said an investor familiar with the transaction.
 
“We are already Ebitda-breakeven and we intend to be profitable by FY19 at a company level,” Falguni Nayar, CEO of Nykaa, told ET, confirming the total of the investment round. “If all goes well for Nykaa, we may need to raise only a small amount of capital in future because from here on, we only need money to fund our working capital growth.”
 
At least three investors in the company are said to have sold part of their stakes in this round, including TVS Capital Funds, which invested in Nykaa in 2015. Exiting Nykaa at this valuation would be beneficial for the private equity firm, which is currently raising its third fund of ₹1,000 crore. TVS Capital did not respond to queries by ET until the time of going to print. Nayar declined to comment on investor exits in this round.
 
Nykaa owns the lion’s share of the online beauty market at 33% and has been growing at a strong pace, having clocked ₹570 crore in net revenue in FY18 from ₹214 crore a year earlier.
 
The FY18 revenue is unaudited and may be revised when the audited report is submitted. For Nykaa, a large part of the focus will be on expanding its offline presence from 17 stores currently to about 55 stores by FY19-end.
 
The funds will also be used to enhance retail distribution so as to boost its private label, which currently forms less than 10% of the revenue pie.
 
“We first started working on distribution for our private labels last year and this year we are investing to build that out. We are selling our private labels through physical retail distribution and it is present across 800 stores,” said Nayar.
 
The domestic online beauty and personal care market is expected to cross $3.5 billion by 2022 from about $300 million in 2017, according to RedSeer Consulting.
Shoot

Trending News

Xiaomi pumps Rs 3,500 crore into India business

BlackBuck's out to raise $150M in new round, valuation likely to jump to $800 M

With $21 Billion, Azim Premji among world’s top philanthropists

Google agreed on a $45M exit package for India-origin exec accused of sex abuse

HSBC pegs Zomato's valuation at $3.6 billion ahead of Swiggy

PayU in talks to acquire online payments firm Wibmo for $60M

Quikr close to acquiring refurbished goods marketplace Zefo in all-stock deal

What life looks like after a layoff from an IT company

General Atlantic & Tencent pump in another Rs 80 Cr in ed-tech unicorn Byju's

US Senator Warren vows to break up Amazon, Facebook, Google

SoftBank extends tech reach with $5B Latin American fund

Coverfox hits the market to raise $50M in new financing round

Cognizant faces US lawsuit alleging discrimination

China's Huawei sues US over federal ban on using its products

Germany's Delivery Hero acquires Zomato's UAE biz, invests in India ops

Ahead of deadline, debate rages on e-commerce policy

Flipkart rejigs reporting of Myntra-Jabong head Amar Nagaram

Grofers raises fresh funds from existing investors, valuation hits $425M

Sachin Bansal invests Rs 250 Cr each in NBFCs Altico & IndoStar: Report

I-bank Wolet files $800k suit over Flipkart’s Upstream buy

Flipkart FY18 revenue up 50%, but losses grow 5x

Pine Labs in talks to acquire Amazon-backed Qwikcilver for $100M

India can become 2nd largest 5G market in 10 years: Huawei

Alibaba rival Pinduoduo seeks to raise $1.5B

Twitter Q4 revenue grows to $909M as video ad sales surge

Mukesh Ambani to invest $1.4B in West Bengal, will help e-commerce expansion

Etail may lose Rs 40,000 crore, retail to get a 3rd of it

Steadview Capital invests $74M in Ola valuing it at around $6B

Byju’s ups revenue to Rs 490 cr in FY 18, losses drop by half

Agritech startups Sabziwala and LivLush merge their business under new entity Kamatan

Avail Finance lands $17.2M from Matrix Partners & Ola, Freecharge and Flipkart founders

RBI suggests tax sops, self-regulation to build fintech space

Swiggy hires new CEO for its Access Service, gets new CFO

Logistics company Delhivery registers 44% increase in FY17 revenues

WeWork to acquire one of the oldest social networks, Meetup

Qualcomm rejects Broadcom's $103 billion offer

EasyRewardz gets $2 million Series-A funding

'Anemic' iPhone 8 demand drags Apple shares lower

Lending platform Lenden Club gets Rs 3.5cr in Equity Investment

On festive sales, Flipkart says 65% clients from Tier-II cities