India: Online cosmetics player Nykaa in talks to raise $11.5m in fresh round

nykaa

Nykaa, a leading player in the online Indian beauty and cosmetics space, is in talks to raise Rs75 crore in a new round of funding that could see the company being valued at almost Rs3,000 crore, two people aware of the development said.

Nykaa was started by former investment banker Falguni Nayar in 2012. Before starting Nykaa, Nayar was managing director at domestic investment bank Kotak Mahindra Capital Co. Ltd. The company offers makeup, skincare, hair care, fragrances, bath and body, luxury and wellness products for women and men.

“Nykaa is in talks with various people to raise its latest round of capital, its fourth round so far. They are talking to both institutional investors such as PE funds, as well as with HNIs and family offices. The company is seeking a valuation of around Rs3,000 crore,” said one of the persons cited above, requesting anonymity as the talks are private.

The company has been growing at a fast clip, he added, and recorded a topline of over Rs200 crore in 2016-17.

According to the second person cited above, TVS Capital an investor in the company, is looking to sell part of its stake in this new round.

“TVS Capital invested in the company in 2015 and they are now looking to exit a large part of their stake in this round. TVS Capital is looking to dilute its stake as its current fund is coming close to the end of its life cycle,” he said, also requesting anonymity.

“We don’t comment on these matters,” said Gopal Srinivasan, founder chairman of TVS Capital Funds in an email response.

Calls and text messages sent to Falguni Nayar too went unanswered.

What stands out about Nykaa is that unlike other e-commerce ventures, the company has until now relied upon home-grown capital to build up the franchise.

Nykaa had last raised funds in 2016, when it raised a little over Rs100 crore from Max India Ltd, the Munjal Family Office, Yogesh Mahansaria and Harsh Mariwala. Earlier in 2015, the company had raised Rs60 crore in a round led by TVS Capital. In its first round of fundraising in 2014, Nykaa had raised Rs20 crore from various investors.

Having started as an online retail firm, Nykaa has in the last couple of years evolved into an omni-channel retailer and now has around 11 offline stores. The company plans to reach 30 offline stores by 2020. Nykaa had opened its first offline store at Delhi airport’s Terminal 3.

Nykaa claims to offer over 80,000 products across 700 brands on its online portal.

Also Read:

India: TVS Capital aims for first close of new fund by March

This article was first published on livemint.com