Emerging Entrepreneurs

Giving personal-care a caffeine fix

Ananya Revanna | Updated on March 10, 2018

Tarun Sharma (right) and Vikas Lachhwani, founders, MCaffeine

TARUN SHARMA, Co-founder, MCaffeine

VIKAS LACHHWANI, Co-founder MCaffeine

Coffee is more than to keep awake; it offers many health benefits, as MCaffeine has found

When Mumbai-based entrepreneurs Tarun Sharma and Vikas Lachhwani decided to start MCaffeine, an online-only caffeine-infused personal care brand, two years ago, they agreed never to use vanity as the selling point.

Vikas says, “Look at how personal care is presented to us today: the fundamental premise of most brands is, if you don’t use our products you’ll be ugly. This is ridiculous and disgusting! Personal care is meant to support good health, wellness and a particular lifestyle; changing one’s skin colour isn’t the point of life. At no point will we ever sell insecurities.”

A way of life

Talking about why they decided to make caffeine the base of their products, they say that they stumbled on some research while poking around the personal care field that surprised them: caffeine — the most-widely consumed psychoactive drug — isn’t just an ingredient you consume to help you stay awake, but has a long list of health benefits.

Intrigued by its ability to strengthen hair and its antioxidant properties, they spent a year doing research on caffeine and its benefits before launching their first product last October. Since then, there’s been no looking back. They currently have 14 caffeine-infused skin and hair products such as neem caffeine facewash with argan oil and vitamin E, hibiscus caffeine SLS free conditioner with argan oil, and shea caffeine cold cream with vitamin E, with plans to increase the range based solely on the different lifestyles people lead today.

Tarun and Vikas, who met through mutual friends, worked on creating a chain of salons called Pep Salons. This is where they came face-to-face with the vast world of personal care. “Since we were in the salon business, we got access to all kinds of products. We realised the business can’t function without the right products, which is when we decided to create our own,” says Tarun.

Their products are natural and they try to use organic ingredients as much as possible. Coffee is their main source of caffeine, but they plan to experiment with cocoa and tea as well. Depending on the product and its requirements they use coffee from various geographical locations. Coffee beans are sourced from Chikkamagaluru and Kodagu in Karnataka and Adimalai in Kerala.

Robust growth

They say the have been growing pretty aggressively and sustainably. Last year MCaffeine, whose parent company is called PEP Technologies, raised ₹2 crore as part of the first capital raise from people including Kaushal Aggarwal, MD at Avendus Capital; Harminder Sahni, MD at Wazir Advisors; Krishna Mehra, ex-founder, Capillary Technologies; and Pranay Jivrajka, founding partner, Ola. They are in the process of closing the pre-series A round.

The brand, in a span of a year, has more than one lakh customers, growing at 60 per cent month-on-month, with an annualised revenue rate of ₹4 crore. They are profitable at unit level and working with the likes of Amazon, Flipkart and other e-commerce retailers to further sales, not just in metros but also in Tier-I and Tier-II towns. “We expect to break even at an organisational level by Q2 next year,” says Vikas.

MCaffeine customers are in the 20-35 age group, well educated, and experience oriented. “Our repeat rates are encouraging both within products and cross-products. Our average repeat time is 45 days,” he explains.

Constant innovation in terms of product, efficacy of product, ingredients, and modes of taking things to people is what helps keep MCaffeine so robust.

Even demonetisation, implemented a month after the company’s launch, and the Goods and Services Tax (GST) haven’t slowed their growth much. “The currency is what moved away during demonetisation; since we’re a digital-only brand we hardly felt an effect. During the time, we were growing rapidly so whatever effect the note ban might have had wasn’t too bad. Every transaction we make, including to our supply chain, is made digitally and hardly any cash exchanges are made,” says Vikas.

“GST was an interesting time as well. Since our growth rate was high, we used the GST as an opportunity to look at and secure our value proposition,” adds Tarun.

Published on December 25, 2017

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