Nykaa Completes Acquisition Of Additional 39% Stake In Dot & Key

Beauty and ecommerce major Nykaa has raised its stake in Kolkata-based skincare brand Dot & Key by completing the acquisition of an additional 39% stake for INR 265.3 Cr.

After the latest transaction, Nykaa’s shareholding in Dot & Key has increased to 90% from 51% earlier, it said in an exchange filing on Saturday (September 21).

Last month, Nykaa had said it would purchase 5.29 Lakh equity shares of Dot & Key from promoters and existing shareholders.

Notably, Dot & Key is the first direct-to-consumer (D2C) brand acquired by Nykaa. It acquired a 51% stake in Dot & Key in 2021.

Founded in 2018, Dot & Key provides differentiated skincare solutions. Nykaa previously said that the brand has been profitable since the fourth quarter (Q4) of the financial year 2022-23 (FY23). Dot & Key’s revenue skyrocketed 244% to INR 198.3 Cr in FY24 from INR 57.7 Cr in the previous year.

In its Q1 FY25 earnings statement, Nykaa founder and chairman Falguni Nayar said, “This has been a fantastic investment by Nykaa and (that’s why we have) decided to go ahead and acquire an additional 39% stake… What we like about Dot & Key is it has a differentiated assortment. It also has clutter-breaking packaging, unique and patented.”

Besides Dot & Key, Nykaa had also announced plans to acquire an additional stake in beauty brand Earth Rhythm for INR 44.5 Cr. The deal is set to be completed by September 2025.

Founded in 2019, Earth Rhythm is a D2C skincare and beauty brand with over 250 SKUs. Its revenue rose 20.3% to INR 30.7 Cr in FY24 from INR 24.5 Cr in FY23. 

It is pertinent to mention that Nykaa acquired an 18.6% stake in Earth Rhythm in 2022. 

The acquisitions are part of Nykaa’s broader strategy to strengthen its beauty and personal care play in India — a flourishing market which is expected to become a $28 Bn opportunity by 2030, accounting for 7% of the ecommerce market.

To shore up its revenue and attract more customers, Nykaa has also ramped up its same day and next day delivery offerings. At the company’s 12th annual general meeting, CEO Nayar said the company is now delivering 60% of its orders within the next day across top 110 cities, which account for two-third of the company’s overall order volumes. 

The ecommerce major has also been intensifying efforts to increase its presence in the Middle East. Nykaa has incorporated two new subsidiaries in Qatar and Saudi Arabia under the brand name Nysaa as the company looks to capitalise on the market opportunity in the the Gulf Cooperation Council (GCC) region. 

The GCC has a per capita spend of a whopping $500/annum on beauty and personal care products, one of the highest globally.