Nykaa, the online retailer of fashion and beauty products, is in early talks with Japan’s SoftBank Group Corp. to raise $150-200 million, according to two people aware of the development. The latest funding round, if it goes through, will take Nykaa’s valuation to anywhere from $700 million to $800 million. It will also be the first foreign investment into the company, which has so far raised capital only from Indian funds and investors.
SoftBank declined to comment. Nykaa did not respond to Mint’s query.
Nykaa, founded in 2012 by former investment banker Falguni Nayar, started as a multi-brand online beauty retailer but has since grown to offer products through mobile app and even brick-and-mortar stores. The company claims to offer more than 80,000 products across 700 brands on its online portal. It also has about 20 offline stores and expects to touch about 50 stores within the next two years.
Often termed India’s Sephora (the French multi-brand cosmetics retailer), Nykaa sells make-up, skincare, hair care, fragrances, bath and body, luxury and wellness products for women and men.
The company is now betting big on its private label products in categories ranging from nail paints and fragrances to shower gels and make-up.
Nykaa, run by FSN E-commerce Ventures Pvt. Ltd, raised about ₹ 100 crore in 2016 from Max Ventures and Industries Ltd, the Munjal Family Office, Yogesh Mahansaria and Harsh Mariwala.
In 2015, the company raised ₹ 60 crore from TVS Capital.
In 2014, it raised about ₹ 20 crore from several investors, as part of its first funding round.
Before starting Nykaa, Nayar was managing director at domestic investment bank Kotak Mahindra Capital Co. Ltd.
For the year ended March 2018, Nykaa posted revenue of ₹ 570 crore, up from ₹ 214 crore in the previous year. The company expects to more than double its revenue in the current financial year.
In August, Mint reported that Nykaa had forayed into premium Indian designer wear with the launch of Nykaa Design Studio.
According to a 2017 report by RedSeer Consulting, the $6.5 billion Indian cosmetics industry is estimated to grow to $20 billion by 2025 at a compound annual growth rate of 25%.
Source: Mint