IPO-Bound Nykaa Acquires D2C Skincare Brand Dot & Key To Foray Into Nutraceutical Space

IPO-bound fashion ecommerce platform Nykaa has acquired a Kolkata-based skincare brand Dot & Key. Nykaa in a statement said that post the investment, the D2C skincare brand will join Nykaa’s stable of owned brands. 

However, the ecommerce platform has not revealed the transaction details. This is Nykaa’s second acquisition of the year. In April, Nykaa acquired online jewellery brand Pipa Bella to capture the growing market for contemporary fashion jewellery in the country. 

Founded by Suyash Saraf and Anisha Saraf, Dot & Key claims to be a new-age skincare solution provider. The D2C brand offers products such as serum, face masks, toners, and cleansers. The brand has recently forayed into nutraceuticals under the brand ‘IKWI’.

Commenting on the development, Falguni Nayar of Nykaa said that with Dot & Key, Nykaa will now be able to enter the nutraceutical space and extend its brand’s reach. 

The move by Nykaa can be seen as a step to strengthen its position in the growing skincare segment in the country and directly compete against the likes of emerging D2C beauty and skincare brands such as SUGAR Cosmetics, Mamaearth, Wow Skin, Plum, among others.  

There has been a tectonic shift among Indian consumers when it comes to opting for skincare products. Earlier there were selected few international brands which dominated the space. However, now it is quite impossible to ignore the above-mentioned brands because of their wide range of products, aggressive pricing, and chemical-free products which the conscious Indian customer digs in.

In the last couple of months, SUGAR Cosmetics bagged $21 Mn in its Series C round in February, whereas Mamaearth closed $50 Mn in a fresh round in July. In April this year, WoW raised $50 Mn from ChrysCapital.  

As per a Statista report, the Indian skincare market generated revenue worth $7.2 Bn in 2021 and is expected to grow at 5.62% CAGR between 2021 – 2025. 

Nykaa’s IPO Way

Founded by Falguni Nayar in 2011, Nykaa has become one of the fastest-growing fashion ecommerce marketplaces in the country. The platform competes against the likes of US ecommerce giant Amazon and Walmart-owned Flipkart. 

The startup recently received SEBI’s nod for its initial public offering. While the total offer of Nykaa’s IPO is uncertain, the ecommerce platform is likely to raise more than INR 4,000 Cr through the public market. 

The platform has recently increased its fresh issue of shares from existing INR 525 Cr to INR 630 Cr. 

It is interesting to note that Nykaa is the only Indian startup company that is heading for an IPO where the promoters of the company hold more than the majority stake. 

As per the DRHP, Nykaa posted a profit of INR 61.9 Cr in FY21 against a loss of INR 16.3 Cr in FY20. The ecommerce platform had posted a loss of INR 24.5 Cr in FY19. 

 Nykaa’s total revenue increased by 37.9%  from INR 1,777.8 Cr in FY20 to INR 2,452.6 Cr in FY21. The ecommerce platform posted an expense of INR 2,377.2 Cr in FY21 as opposed to INR 1,790.2 Cr in FY20. 

Nykaa entered the unicorn club in 2020 when it raised INR 100 Cr ($13 Mn) from existing investor Steadview capital at a valuation of $1.2 Bn.