Beauty products e-tailer Nykaa raises $14.4 mn from TPG Growth

Beauty e-tailer Nykaa has raised Rs 100 crore ($14.4 million) in a fresh round of funding from US-based private equity firm TPG Growth.

Nykaa will use the money mainly to introduce more beauty brands, expand its physical retail stores across the country and to build its e-commerce business on the website and app, a company statement said.

The company recently launched Nykaa Man, its men's grooming business, and Nykaa Pro, a portal for professional beauty consumers. It is also expanding into the fashion business and has established with a new website and app offering over 150 brands.

For its fashion business, Nykaa last month bought women styling platform 20Dresses.com for an undisclosed sum. The deal will help Nykaa develop and expand its private label business.

“As we look for new ways to serve our customers through initiatives like physical retail, Nykaa Man and Nykaa Fashion, our growth momentum will continue to remain strong in the coming years,” said Falguni Nayar, founder and chief executive at Nykaa.com.

Run by FSN E-Commerce Ventures Pvt. Ltd, Nykaa was founded in 2012 by investment-banker-turned entrepreneur Nayar, who was a former managing director at Kotak Mahindra Capital. The online marketplace sells products across categories ranging from skincare, hair care, fragrances, bath and body, and luxury products for both women and men.

“With its omnichannel presence, exclusive brand partnerships, high consumer engagement and well-curated product lines, Nykaa has emerged as a disruptive force in the Indian beauty landscape in India,” said Akshay Tanna on behalf of TPG Growth.

Nykaa

For the financial year 2017-18, the beauty e-tailer reported net revenue of Rs 570 crore as compared to Rs 214 crore in the previous fiscal. It did not disclose profit and loss figures but claims that it will turn profitable in the current financial year.

Since 2015, the firm has been operating on an omnichannel model and currently has 17 stores across the country in two formats — Nykaa Luxe and Nykaa On Trend. The company also offers its own in-house beauty products.

Nykaa has been expanding its offline presence in the country and it aims to open 55 stores by March next year. It claims to offer over 850 brands and 100,000 products.

With brands like M.A.C, Bobbi Brown, Clinique, Estee Lauder and Smashbox Cosmetics on the online platform, the luxury vertical accounts for 15% of Nykaa's total revenue.

It raised capital from mid-market private equity firm Lighthouse last September, paving the way for existing investor TVS Capital Funds to make an exit.

In May 2018, it closed its Series D round of funding at Rs 165 crore ($24 million), receiving money from its existing investors including Hero Group’s chairman Sunil Munjal, the family offices of consumer goods maker Marico’s Harsh Mariwala and private equity investor Warburg Pincus.

TPG

The global alternative asset management firm entered India through Newbridge Capital, its Asian arm, in 2002. It made its first investment in India the following year when it backed drugmaker Matrix Laboratories. In 2006, TPG merged Newbridge with itself and began investing in India directly out of its global funds.
The PE firm's India play is dominated by TPG Growth, which makes growth-equity bets or invests in mid-market companies. TPG Growth has backed digital payments firm AGS Transact, eyewear retailer Lenskart, footwear maker Campus and online ticketing company BookMyShow, among others, in India.

It has also set up a healthcare investment platform, called Asia Healthcare Holdings, which has received funding from Singapore state investment firm Temasek Holdings.