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            Nykaa.com’s fund raising comes at a time when investors have begun talking about the need for these start-ups to focus on making money

            Online beauty and wellness retailer Nykaa.com has raised $9.5 million from multiple investors, including the family offices of Marico Industries chairman Harsh Mariwala and Hexaware Technologies Ltd chairman Atul Nishar.

            Falguni Nayar, founder of FSN E-Commerce Ventures Pvt. Ltd, that runs Nykaa.com, confirmed the transaction but did not reveal the amount of stake bought by the investors.

            Dalip Pathak, who established the India business for private equity firm Warburg Pincus, LLC in 1994, has also invested in Nykaa.com in his personal capacity, along with Michael Carlos, former president of flavours and fragrance company Givaudan of Switzerland.

            Nykaa.com’s fund raising comes at a time when investors have begun talking about the need for these start-ups to focus on making money, after they pumped in more than $8 billion into e-commerce companies since the start of 2014.

            A person close to the development, who did not want to be identified, said the retailer has sold around 20% of its stake.

            The Series B funding was led by the private equity arm of TVS Group.

            Investment company Techpro Ventures Pvt. Ltd, too, participated.

            Nykaa, which hosts over 350 brands and 35,000 products, claims it has sold 1.25 million products to date, with over 4 million site visitors every month.

            The latest equity investment would be used to launch a private label, increase marketing activities and grow the team, Nayar, who is chief executive officer, Nykaa.com, said.

            She said the firm is not chasing valuations but it is adopting a conservative approach.

            Nayar said the firm is positioning as retailer-cum-private label company.

            She hoped that the firm will turn EBITDA (earnings before interest, tax, depreciation and amortization) positive in next 18 to 20 months.

            Harish H.V., partner at advisory firm Grant Thornton India Llp, said people are trying to create specialised categories such as beauty with value added tips, inputs rather than a pure sale of beauty products.

            “I believe the market is big enough for mega e-tailers like Amazon, Flipkart as well as for niche retailers in different categories, Harish said.

            Obviously niche retailers need to ensure they are providing value and able to create their brand to be successful and that is their challenge,” he said.

            Nykaa.com plans to increase its gross merchandise value five-fold in the next financial year, Nayar said.

            As part of Nykaa.com’s omni-channel strategy, this firm has plans to open three destination stores in Delhi, Mumbai and Bengaluru.

            Nayar said the firm will start 20 more such stores in the coming years.

            Set up in 2012 by Nayar, the former managing director of Kotak Mahindra Capital Investment Banking, along with her husband Sanjay Nayar, chief executive at KKR India, Nykaa.com employs 150 people.

            Gopal Srinivasan, chairman and managing director of TVS Capital Funds, said the private equity firm will partner with Nayar to scale this venture into multi-brand, pan-Indian omni-channel operation over the next few years.

            “Nykaa has hit upon a formidable combination: the fast growing beauty and wellness segment in India, together with the rise of Internet retailing,” said Pathak.

            The article appeared in the Mint. The article can be found here.

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