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Almost a year after it raised ₹60 crore from TVS Shriram Growth Gund, online beauty retailer Nykaa.com is getting ready to raise up to ₹100 crore. This will be its largest fund raising since its launch about four years ago. The e-tailer will use the funds primarily to expand its private labels and offline stores.
“It has been almost a year since we raised ₹60 crore from family offices and funds like TVS Shriram. Now we have started talking to our investors again and will be raising ₹80-100 crore in two-three months,” said Falguni Nayar, Nykaa founder and CEO.
With plans to turn EBITA positive next year, Nykaa, operated by FSN E-Commerce Ventures, is in talks with both existing and new investors to raise the fresh round.
“Raising money should not be a problem since investors are no longer chasing GMV (gross merchandise value) but in having the right unit economics and scale, which we are building. There are people who are ready to invest into speciality retail since globally it is a successful model,” Nayar added.
Investors in the previous round included Techpro Ventures, the family office of Atul Nishar (Chairman of Hexaware Technologies), family office of Harsh Mariwala (Marico Chairman), former Warburg Pincus executive Dalip Pathak and former President of Givaudan Fragrances, Michael Carlos.
“In our last fund raise we got a post money valuation of ₹425 crore and now we expect the pre money valuation to get better as we start talking to our investors.
“In our first round we sold an about 20 per cent stake but this time it is going to be a little less than 10 per cent in the company,” Nayar said.
Emulating the model of global retailers like Sephora and Ulta, Nykaa is poised to expand its brick-and-mortar presence under the Nykaa Lux brand. “We intend having 30 stores by 2020 and these would in places where beauty sells, like malls, high streets and travel retail,” she said.
The company already operates outlets in Delhi and Mumbai airports. Two are slated to open in Mumbai malls. It is also eyeing smaller cities like Mangaluru. Besides, Nykaa plans to extend its private label range beyond a few products — such as nail enamel and a bath & body line — to a full range of cosmetics and even a natural products line.
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