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Omnichannel beauty-and-wellness retailer Nykaa has raised ₹100 crore ($14 million) from private equity investment firm TPG Growth, which sets it on track to be a part of the Unicorn club of private companies that are valued at over $1 billion, in the near future.
FSN E-Commerce Ventures Private Ltd, which runs Nykaa, has been allotted 2,83,287 equity shares of ₹10 each at a premium of ₹3,520 per share on March 28 as per the company’s RoC filings sourced by business intelligence platform paper.vc.
“Nykaa appears to be on track to joining Asia’s Unicorn ranks. TPG Growth’s ₹100-crore investment gives it a spectacular jump in post-money valuation of ₹5,027 crore ($724 million),” founder of paper.vc, Vivek Durai, told BusinessLine .
The fund raise comes after a long hiatus in institutional investment in the beauty and wellness platform. Nykaa’s previous backers include Hero Enterprise Chairman, Sunil Kant Munjal who invested ₹30 crore in the company in 2016; TVS Shriram Growth Fund which invested ₹25 crore in 2015 and angel investors including corporate lawyer Zia Mody who invested ₹1 crore in Nykaa in 2014. This fresh raise takes Nykaa’s total fund raise to $107.5 million in eight rounds.
Both the hiatus and the extraordinarily high valuation are interesting given Nykaa’s financial performance. However, the valuation can be explained given Nykaa’s recent numbers. “The start-up posted a ₹28.2 crore loss for FY 2018 compared to ₹36.3 crore for the previous year. But these losses pale in comparison to its revenue which jumped from ₹214 crore in FY 2017 to ₹578 crore in FY 2018” said Durai.
Nykaa recently acquired 20Dresses, an exclusive members-only styling site for women, for an undisclosed amount. India’s online beauty and personal care market is expected to exceed $3.5 billion by 2022 from $300 million in 2018, as per estimates from RedSeer Consulting.
Founded in 2012 by former MD of Kotak Mahindra Capital Company, Falguni Nayar, Nykaa currently offers a portfolio of over 1,000 brands across makeup, skincare, haircare and wellness for both men and women.
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