Lotus Herbals Floats $50 Mn Fund To Back Beauty Care Startups: Report

Personal care major Lotus Herbals has reportedly floated a $50 Mn fund to invest in early stage startups in the beauty category. 

As per ET’s report, the Lotus Innovation Fund is the second such fund to be launched in India. In 2022, New Incubation Ventures launched a strategic early stage investment fund with Nykaa.

Globally, L’Oreal has an Inclusive Beauty Fund, and Unilever invests in beauty startups through Unilever Ventures.

“We will invest in patent-driven startups that require capital; that’s a white and scalable space, amid a very cluttered market with limited differentiation and a lot of brands being deeply discounted,” Nitin Passi, managing director of Lotus Herbals told ET.

Inc42 has reached out to Lotus Herbals for a comment on the development. The story will be updated based on the response.

In 2022, Lotus Herbals acquired a 20% stake in Yogic Secrets. Following this deal, the nutraceutical startup secured an undisclosed amount of strategic funding from the family office of Lotus Herbals. This development came less than a month after Lotus Herbals invested $220 K in TV actress Anita Hassanandani’s D2C startup, Better Beauty.

Additionally, in October, Lotus Herbals backed the clean beauty marketplace Vanity Wagon, and in January, the cosmetics brand acquired a 25% stake in Conscious Chemist. 

Founded in 1993, Lotus Herbals is a natural cosmetics company that blends the 5,000-year-old science of Ayurveda with modern technology. They claim to offer a well-researched range of over 500 skincare, haircare, suncare, and makeup products for both retail and professional markets.

Lotus Herbals’ portfolio includes Fixderma India, the owner of Fixderma and FCL, and SoulTree.

Passi added the cosmetics maker is looking to invest in startups with an “innovation plus growth” mindset. “We will back select two-three companies every year, hand-hold them for five-seven years, and focus only on India.”

An Inc42 report estimates that India’s beauty and personal care market is growing at a CAGR of 12.5% and is projected to reach $37.2 Bn by 2025.

This development comes at a time when startups in the beauty and personal care segment are witnessing significant interest from investors. 

A few days back, D2C beauty brand RENEE Cosmetics raised INR 100 Cr (around $11.9 Mn) in its Series B1 funding round co-led by existing backers Evolvence India and Edelweiss Group.

In the same month, D2C personal care startup 82°E raised INR 50 Cr (around $6 Mn) as part of its extended seed funding round.

Earlier this month, Skincare solution startup CHOSEN by Dermatology secured seed funding of $1.2 Mn from friends and family. 

Last year, another BPC startup Clensta bagged INR 75 Cr in a funding round led by TradeCred.