With the wide array of products and retail outlets lined up for the next stage of growth, online beauty marketplace Nykaa has raised $15.72 Mn (INR 113 Cr) from consumer-focused private equity manager’s Lighthouse India Fund III.
With this funding, existing investor TVS Shriram Growth Fund, which invested in Nykaa in 2015 and 2016 as part of the Series B and Series C fundraise, has exited the company.
Founded in July 2012, Nykaa is an online marketplace for beauty and wellness products and has been continuously expanding its offline presence in the country and offers over 850 brands and 100K products.
On the funding, Falguni Nayar, founder and CEO, Nykaa, said, “We are excited to welcome Lighthouse to our shareholder base as we launch into our next phase of growth. We believe they will bring to bear their expertise in the retail sector propelling Nykaa to even greater heights. As we add new verticals and product categories we will continue to build on meaningful experiences that engage and delight our customers.”
The company last raised $24.45 Mn (INR 165 Cr) in Series D funding round to help its growth capital and expand its retail footprint. It further aims to fuel its plans towards expanding its offline presence from 17 stores currently to about 55 stores by FY19-end.
Sean Sovak, co-founder of Lighthouse, said, “We are truly thrilled to become a shareholder in Nykaa. What Falguni and team have created is nothing short of brilliant, completely disrupting the personal care market in India, by focusing on ease of access and superior customer experience. We are excited by the opportunity ahead for the company.”
Here’s a quick update about everything happening at Nykaa:
- Nykaa has added a new section for men called Nykaa Man and expects it to contribute about 2% to the company’s overall revenues
- The company has also introduced Nykaa Design Studio, a curation of premium Indian fashion designers
- In March 2018, it also launched Nykaa Network – a community for encouraging consumers to engage and create beauty conversations
- The gross merchandising volume for the year ending March 2017 touched $43.3 Mn (INR 280 Cr), with an average of 10K orders per day across all the platforms (online and offline)
- In FY18, Nykaa recorded over $86.09 Mn (INR 570 Cr) in net revenue in FY18 from $32.32 Mn (INR 214 Cr) a year earlier
- EBITDA positive for two quarters in a row
Indian Beauty And Wellness Market
Beauty ecommerce websites like NewU, Purplle, etc, with their exclusive focus on beauty and wellness products, are leading in the space.
Here’s a quick look into recent happenings in the segment:
- Mumbai-based online beauty products marketplace Purplle raised $2.57 Mn (INR 17.5 Cr) from a clutch of investors in a fresh funding round
- Grocery delivery startup BigBasket has also decided to venture into cosmetics with its private label
- Amazon India was planning to launch its own private label of beauty and personal care products.
- Flipkart-subsidiary Myntra announced its plans to open beauty and wellness offline stores
The industry outlook says:
- In a December 2016 report, FICCI estimated the Indian wellness industry would grow at a CAGR of 12% to achieve a $23.4 Bn turnover by 2019-20
- A report claimed that the Indian beauty industry was looking towards a market value of $12.4 Bn by 2017-2018 and is expected to grow at the rate of 15% to 20%
- RedSeer Consulting report suggested that the domestic online beauty and personal care market was expected to cross $3.5 Bn by 2022
With beauty and wellness becoming a major industry with major investors betting on it, the market has a huge potential to grow further into niche areas.