Nykaa, an online beauty and wellness retailer, has raised $9.5 million in Series B round of funding led by TVS Shriram Growth Fun along with various investors that includes the family offices of Marico Industries chairman Harsh Mariwala and Hexaware Technologies Ltd chairman Atul Nishar.
In 2012, Falguni Nayar quit her high profile finance career as investment banker to her own startup Nykaa. Nykaa is a beauty and wellness e-commerce platform that sells branded products across categories of makeup, skincare, hair care, fragrances, bath & body and luxury products for women and men. It sells around 350 brands and 35,000 products and has more than 175,000 customers around 900 cities in India. The startup has a warehouse in Mumbai and functions on an inventory-based model. It claims to have sold 1.25 million products with more than 4 million visitors every month.
“When I was starting with ecommerce, I carefully chose beauty and wellness because there was not too much competition. The other spaces like electronics and fashion had too many players trying to address them. I consciously chose an area that was small but expected to grow and a bit difficult to do,” said Falguni.
With the fresh funds raised, Nykaa plans to use it to expand market, increase the team members and improve its marketing strategies. In the near future, the startup plans to increase its gross merchandise value (GMV) five times. Apart from this, the company is also looking out to open physical stores in Delhi, Mumbai and Bangalore in the locations with higher footfall. It already opened up a store in the Terminal 3 of Delhi International airport. Further to the funding, Narayan Ramachandran, former country head of Morgan Stanley-India would soon join Nykaa’s board as TVS Capital’s representative.
Nayar said, “We greatly value the confidence our investors have reposed in our strategy and our commitment to building a sustainable online beauty and wellness business.”
Though not much details of the investment were disclosed, reports suggest Nykaa has sold around 20% of stake. A year ago, it had raised around $3.4 million from other family offices and high net worth individuals where it said to have diluted more than 10% stake. The company is expected to turn EBITDA (earnings before interest, tax, depreciation and amortization) positive in next 18 to 20 months.