D2C Startup Mamaearth Gears Up For IPO; Converts Into Public Company

Gurugram-based D2C babycare and skincare unicorn Mamaearth has converted into a public company as it readies for an IPO. The startup plans to go public in 2023 and will shortly be filing its draft red herring prospectus (DRHP).

According to filings, the parent company of Mamaearth has changed its name from Honasa Consumer Private Limited to Honasa Consumer Limited.

For the uninitiated, converting from a private to a public company is the first step towards going for a public listing. Following this, the company files a DRHP with the Securities Exchange Board of India (SEBI) outlining the amount it will be raising, the usage of funds and the company’s financial health.

Husband-wife duo Ghazal and Varun Alagh-led Mamaearth turned profitable in FY22, posting a net profit of INR 19.8 Cr on a standalone basis (against a net loss of INR 1,332.2 Cr in FY21).

Its operating revenue also surged more than 2X year-on-year (YoY) to INR 931 Cr with expenses nearly halving to INR 924.6 Cr in FY22.

Founded in 2016, the startup started as a babycare brand and later moved on to selling beauty and skincare products. The D2C house of brands achieved unicorn status in late December 2021, when it raised $38 Mn in its Series F round.

Mamaearth counts several marquee VC funds, angel investors and family offices as its investors including Sequoia India, Stellaris Ventures, Fireside Ventures, Marico’s Rishabh Mariwala, Snapdeal founders Kunal Bahl and Rohit Bansal and actress Shilpa Shetty Kundra, among others. 

It competes with the likes of beauty marketplace platforms such as Plum, WoW Skin, The Moms Co, Biotique and traditional businesses such as VLCC, Vicco and more. 

While the D2C startup has previously maintained its stance of listing on public bourses in its 3-years-plan, reports have quoted internal sources of a potential public listing by July 2023.

Mamaearth, which operates across Southeast Asia and parts of the MENA region, operates as an omnichannel brand, with 70% of its sales from online channels and 30% from offline partners. The startup also counts several acquired and in-house brands in its portfolio such as Dr Seth, BBLUNT, Momspresso, Aqualogica, Ayuga, The Derma Co, and more.

While Mamaearth is planning for an IPO within the ecommerce space, several IPO-bound ecommerce startups have either halted their public listing plans quoting unfavourable conditions. 

For instance, Kunal Bahl’s Snapdeal filed its DRHP in December last year and there is no clarity on its IPO plans yet. D2C startup boAt also took a U-turn on its public listing plans and went for an equity round, hinting that it has shelved IPO plans intermittently. 

In the ecommerce space, Mamaearth-competitor Nykaa is the only listed platform which went for a successful listing but did not perform well on the bourses later.

The development was first reported by Entrackr.