Nykaa raises fresh funds from former Hero MotoCorp joint MD

FSN E-commerce Ventures, which owns and operates online beauty platform Nykaa, has raised about $2.6 million in an equity capital infusion from Sunil Kant Munjal, former joint managing director of two-wheeler manufacturing major Hero MotoCorp. 

On May 26, the company issued 32,350 equity shares to Munjal at Rs 6,049.56 per share totalling to Rs 19.60 crore, regulatory filings showed. Queries sent to Nykaa and the investor were not answered until the time of publishing this report.

In 2016, Munjal led a $12 million in a funding round in Nykaa along with other investors including Techpro Ventures, Harsh Mariwala, former Warburg Pincus executive Dalip Pathak and former president of Givaudan Fragrances, Michael Carlos. 

Nykaa’s latest fundraise comes on the back of infusions by London-based hedge fund Steadview Capital in the past two months. The company raised  $13.2 million in April and $8.85 million in May in separate rounds from the alternative asset manager. 

With the funding, the Mumbai-based startup entered the unicorn club with a reported valuation of $1.2 billion. Unicorn is a term used to describe startups that have reached $1 billion valuation or more. 

Nykaa has so far raised $122 million since inception, without including the latest investment, according to data available with VCCEdge. TVS Shriram Capital, JM Financial, TPG Growth and Lighthouse Advisors are among the other institutional investors in the company.

In the financial year 2018-19, Nykaa reported a net profit of Rs 2.31 crore as against a loss of Rs 17.71 crore in the previous year on revenues of Rs 1,161 crore.

Founded in 2012 by investment-banker-turned-entrepreneur Falguni Nayar, Nykaa sells 1,500 brands and three lakh products across categories like skin care, hair care, fragrances, bath and body, and luxury products for women and men. 

The company claims to have 55 lakh monthly visits on the platform with sales of 13 lakh orders a month and 72% repeat customers, according to its website. Nykaa competes with Manash Lifestyle-owned beauty product portal Purplle, which is backed by Goldman Sachs and JSW Venture Fund, Ivy Capital and Blume Ventures.