How D2C Brand Clensta Clocked INR 78 Cr In FY24 Revenue By Doubling Down On Customer Retention & Omnichannel

Talk about Siachen, and everyone can tell you about the hardships people face across the terrains at 5K metres and above. However, few realise that one cannot even use typical personal care products like shampoos and shower gels at that altitude due to extreme water scarcity. Getting a shampoo or a bath requires digging out ice and melting it, a challenging task in sub-zero temperatures.

Puneet Gupta, an engineer by training who honed his technology and innovation skills at IIM-Calcutta, was deeply affected by these harsh realities during an interaction with an army general. Gupta always wanted to join the armed forces but ended up working on product development, which culminated in a role at Honeywell. But after that interaction, he felt a strong nudge towards doing something more in a different capacity. (My boys can’t take a bath – that simple statement has never left his mind.)   

To transform personal hygiene practices for special requirements, Gupta entered into a strategic collaboration with IIT-Delhi’s biotechnology centre and reached a breakthrough in waterless and STAR technologies after three years of rigorous R&D. He launched Clensta in 2016 and commercialised in 2019 – currently offering haircare, body care, skincare categories, including two flagships – a waterless shampoo and a waterless body bath.

For context, waterless technology helps eliminate water usage for personal care needs. One can use a 100 ml bottle of rinse-free body wash and easily wipe it off as it does not leave much residue instead of taking a standard bucket bath. This spells convenience and guarantees significant water conservation, a vital step towards a sustainable future. The Indian government has granted Clensta a patent for its waterless invention. 

The brand has also worked on STAR technology (safe transdermal absorption of reactive ingredients), which helps improve the efficacy of personal care and wellness products. Simply put, it works like a medical patch, allowing nano-sized nutrients like iron, iodine and vitamins to reach the bloodstream through skin pores for long-lasting benefits. Clensta is reportedly working on such ‘healthy’ lip colours and bindis that may soon take the Bharat market by storm as nutritional and wellness disparities plague Indian women.

Its formulations contain active ingredients like niacinamide, glutathione, hyaluronic acid etc and the effective market-first ingredients, including red aloe vera, rosemary, egg extracts to maximise their personal care benefits. 

The brand currently offers 70+ products and more than 80 SKUs. All Clensta products are FDA-certified and undergo rigorous quality checks at pre- and post-production stages (more on that later).

Clensta raised $12 Mn in debt & equity funding. It serves nearly 15K pin codes through its dedicated website and online marketplaces like Amazon, Flipkart and Nykaa. It is expanding its global footprint across Saudi Arabia, Maldives, Singapore, Malaysia, Nepal, Dubai, African markets  and more.

According to Gupta, the brand clocked INR 78 Cr in FY24, a YoY growth of 129% from INR 34 Cr in FY23, and eyes an exit ARR of INR 300 Cr (a monthly recurring revenue of INR 25 Cr) in the current financial year. 

Clensta’s USP: Natural Ingredients And Tech Power Packaged In Personal Care 

Waterless product design has immense growth opportunities, given its eco-friendly approach and firm alignment with water sustainability. 

For instance, the global waterless cosmetics market is projected to reach $24.2 Bn by 2030, growing at a CAGR of 13.4% from 2024. Additionally, research reports predict the rise of dry and green brands in personal care.    

Such market trends sound encouraging, but spotting a niche and knowing how to fill it require varied expertise. So, in 2023, Clensta roped in Mamaearth’s Ashish Mishra (then senior vice-president at the personal care brand and looking after offline and international business) as its’ cofounder and CBO. With more than two decades of retail experience, Mishra currently leads distribution, while Gupta is in charge of product development.

Building the core pillars of the business was not easy. In the early days, customers tended to define what a company should focus on. For Clensta, focusing on the following three core areas helped it navigate its journey.

Deep collaborations to leverage expertise and stay agile: Instead of setting up an asset-heavy independent unit, Clensta’s initial R&D started at IIT-Delhi. As of now, Clensta products are developed in 10 facilities.

“IIT-Delhi recognised our potential early on, providing funding and research support to Clensta. This partnership was pivotal, helping us transition from an innovative concept to a tangible prototype. After finding the product-market fit, we saw a significant uptick in interest and initial adoption due to IIT-D’s endorsement. It also helped us achieve nearly 100% growth every year,” said Gupta.  

Precision product development: Unlike many of its peers, Clensta uses AI tools (one is still in beta) to analyse customer requirements, review product feedback and measure post-purchase customer satisfaction. 

An automated data processing system and a comprehensive data analysis enable the new product development (NPD) team to identify consumer requirements, opt for precision development and enhance customer experience.       

Meticulous testing for quality control: From raw material testing to production and packaging, Clensta follows a series of rigorous quality checks to ascertain that its products meet required industry standards.

All ingredients and packaging materials undergo thorough testing to ensure compliance with quality, safety and durability norms. A quality assurance (QA) team also conducts in-process quality checks to monitor ongoing production.

The brand now caters to major hospitals such as AIIMS   and sells its products to the Indian Armed Forces, in Siachen and the broader B2C personal care and home care markets. 

Funding, Repeat Sales & Omnichannel Expansion: How Clensta Is Navigating Key Growth Hurdles

Despite Clensta’s product innovations and initial funding from IIT-Delhi, raising capital became a massive challenge when the brand went into full commercial mode. Also, a worldwide pandemic, followed by a harsh funding winter, did not work out well for young ventures.

Clensta has raised multiple investments from Venture Catalysts++ (VCats++), but beyond the capital, the VC firm provided significant value and support in terms of strategic vision and operational efficiency.

“We have greatly benefited from its vast networks, striking industry insights and guidance on course correction and big-picture thinking,” said Gupta.

He claimed that the startup’s monthly recurring revenue grew by 300% since the last funding infusion by VCats in July 2023 and the number of SKUs increased by 250%. 

Omnichannel is the way to go: Another key challenge is building an omnichannel (online+offline) business for maximum reach and customer convenience. As a keen observer of industry trends, Mishra, CBO and cofounder of Clensta feels certain that 60% of Clensta’s India revenue will be generated offline for the next three years. 

Clensta has already built a strong presence offline (across 57 cities, including major Tier II locations). Now, it is consolidating its position in these existing markets by ensuring ready access to all its products and impeccable customer service. Although 80% of its revenue comes from Tier I cities (Tier II and III account for 15% and 5%, respectively), the brand is making strides to address the personal hygiene needs of Bharat, where water scarcity is a red-hot reality. 

Its products are also sold on its website and leading ecommerce platforms like Nykaa, Flipkart and Amazon to enhance their reach.

The Road Ahead For Clensta

In a fast-evolving personal care space, innovation-first outliers like Clensta need to stay ahead of the competition by focussing on two major areas: New technologies for better products and new markets for revenue growth.   

Although the concept of anhydrous (waterless) products in the beauty and personal care (BPC) space originated in South Korea nearly a decade ago, its worldwide popularity has only grown recently. However, competition is already heating up in the global arena, with the likes of Unilever and L’Oréal gunning for more patents to enter the ‘waterless’ BPC segment and reduce their water usage for manufacturing in sync with the global sentiment. 

Overseas brands like DryBath, Loli, Pinch of Colour and Vapour also dominate this space, even though some are not pure-play personal care brands. Closer home, companies like Aadhunik Ayurveda and Soap Square may give Clensta a run for its money. 

Additionally, issues related to waterless formulations, such as product stability and shorter shelf life, can lead to innovation challenges. Essentially, ventures like Clensta need to be at the top of their technology game to ensure the adoption of comparatively expensive product lines at scale.

The exponential growth of the BPC market in India will be a growth driver. According to Inc42 data, the beauty and personal care market is expected to grow from $5 Bn in 2023 to $28 Bn in 2030, at a CAGR of 28%

Will the rapidly expanding local and global demand strengthen the startup’s plan to grow globally, bet more on sustainable hygiene tech and emerge as a big brand, rolling out different categories and product lines to meet unique needs? As Clensta continues to make affordable and effective personal care formulations in India for the world, it may soon lead to a new chapter and help script a new growth narrative.

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