SUMMARY
HUL will buy out OZiva for a cumulative sum of INR 264.28 Cr in multiple tranches
Unilever will also acquire a 19.8% equity stake in Wellbeing Nutrition through primary infusion and secondary buyout for a consideration of INR 70 Cr
The total addressable market opportunity of the Indian D2C space is estimated to grow to $300 Bn by 2030
FMCG giant Hindustan Unilever Limited (HUL) has invested close to INR 335 Cr in acquiring stakes in two D2C nutrition brands OZiva and Wellbeing Nutrition as it looks to bolster its play in the emerging category.
HUL will buy out OZiva for a cumulative sum of INR 264.28 Cr in multiple tranches. It will initially acquire a 51% equity stake in the startup through a combination of primary infusion and secondary buyouts and will acquire the balance 49% at the end of 36 months based on pre-agreed valuation. The first phase is expected to be completed by January 2,2023.
The Oziva deal will also entail indirect acquisition of wellness brand Zenherb Labs.
On the other hand, Unilever will also acquire a 19.8% equity stake in Wellbeing Nutrition through primary infusion and secondary buyout for a consideration of INR 70 Cr.
The transactions are expected to be completed in the next 1-3 months. As part of the deal, HUL representatives will join the Board of each of the companies.
Besides, Aarti Gill and Mihir Gadani will continue to lead all operations and functions at OZiva while Avnish Chhabria will continue to head the current team at Wellbeing Nutrition.
The deal will enable the startup to enter the highly competitive ‘Health and Wellbeing’ category and scale the business via its expertise in the omnichannel arena. On the other hand, the D2C startups will leverage HUL’s capabilities in the domain to scale their business and expand into newer markets and channels.
“These strategic investments give us an entry into the fast-growing Health & Wellbeing category… I strongly believe that HUL is well-positioned to support further scale-up of these businesses through our R&D, market development, distribution capabilities and Unilever’s global Health & Wellbeing expertise,” said HUL’s chief executive officer (CEO) and managing director Sanjiv Mehta.
Reacting to the development, Oziva cofounders Aarti Gill and Mihir Gadani in a joint statement said, “As the next step in this journey, with OZiva’s focus on innovation in the space of health & wellbeing and HUL’s strong capabilities in category development and distribution, we believe we can together create a stronger purpose led brand that brings us closer to our vision and touch more lives around the world.”
Chiming in, Wellbeing Nutrition CEO and founder Avnish Chhabria said, “We are very excited to welcome onboard Hindustan Unilever as a strategic investor… We believe this partnership will help scale Wellbeing Nutrition by leveraging HUL’s reach and capabilities and become a lifestyle wellness brand of choice.”
Founded in 2016 by Gill and Gadani, OZiva is a D2C platform that sells plant-based products across categories such as women’s health, skin, hair, general wellness, among others. The startup reported a turnover of INR 21 Cr in FY20, which rose to INR 72.11 Cr in FY21. OZiva last reported a turnover of INR 124.17 Cr in FY22.
OZiva last raised $12 Mn in a Series B round led by Eight Roads Ventures in March 2021.
On the other hand, Wellbeing Nutrition was founded in 2019 by Avnish Chhabria. It offers a range of nutraceuticals, organic as well as non-genetically modified vitamins and minerals for its customers.
The startup reported a turnover of INR 19.40 Cr in FY22, up from INR 5.33 Cr it posted in the previous fiscal year. The Mumbai-based startup last raised a funding of $2.2 Mn as part of its Series A funding round led by Fireside Ventures in June last year.
HUL joins a host of FMCG giants that have taken a plunge into the D2C space with the acquisition of such new-age startups. Late last month, pharmaceutical giant Mankind acquired a majority stake in D2C wellness brand Upakarma Ayurveda for an undisclosed amount.
Earlier this year, another FMCG major Marico acquired a 53.98% stake in D2C healthy foods brand True Elements while competitor Emami also bagged a 19% equity stake in nutrition-focused D2C FMCG startup TruNativ for an undisclosed amount.
The flurry of announcements come as FMCG players look to bolster their play in the D2C category. Home to more than 50,000 digital-first brands, the Indian D2C market is projected to grow to a total addressable market opportunity of $300 Bn by 2030. It is this burgeoning market that these consumer goods companies want to tap into.
