Beauty e-tailer Nykaa bags undisclosed funding from Boston-based Fidelity Investments
Indian beauty and fashion e-commerce unicorn Nykaa announced that it has raised an undisclosed amount of funding from the Boston-based asset management firm, Fidelity Management & Research Company. The funding was made through a secondary transaction, facilitating a partial exit for Nykaa's early investors. Some of Nykaa's employees also sold their ESOPs (Employee Stock Ownership Plan) through the investment. Here are more details.
Commenting on the latest fundraise, Falguni Nayar, the Founder and CEO of Nykaa, said, "We are very excited to have Fidelity, one of the largest asset managers in the world, to join as a partner in our growth journey." "Their investment in a private company in India is testament to the strength of our brand and business model," she added.
Earlier in March this year, Nykaa raised a funding of Rs. 166 crore from one of its existing investors, Steadview Capital, through a primary transaction. With this, Nykaa entered the unicorn club with a valuation of over $1.2 billion. Other investors of the beauty and fashion e-tailer include TPG Growth, Lighthouse Funds, Sharrp Ventures as well as Bollywood actors Katrina Kaif and Alia Bhatt.
"Nykaa is appropriately positioned to benefit from the recent tailwinds that have supported sales for predominantly online businesses," said Nykaa said in a statement. "The combination of accelerated consumer activity online, and overall brand performance for Nykaa has boosted its market share in the beauty business as well as jump-started growth for its fashion platform," it added.
Nykaa offers more than 1,500 brands, including luxury labels, and 130,000 products to its customers across online and offline channels. The startup also has its own private label for beauty and personal care products. Nykaa claims it has been fulfilling 1.5 million orders every month.
Nykaa reportedly generated revenue amounting to Rs. 1,860 crore in FY 2019-20 with EBITDA (earnings before interest, taxes, depreciation, and amortization) of Rs. 94 crore. In FY 2018-19, it recorded revenue of Rs. 1,159.32 crore with EBITDA of Rs. 2.3 crore. Interestingly, Nykaa expects a 40% growth in its revenue in FY 2020-21 thanks to the rise in e-commerce sales despite the COVID-19-induced lockdown.
Nayar, a former Managing Director at Kotak Investment Banking, founded Nykaa as an ecommerce platform for beauty and wellness products in 2012. Later, the Mumbai-headquartered company launched offline operations in 2015. Nykaa currently has over 70 offline stores, and plans to open 40 more in the future. Nykaa competes directly with Purplle, Plum, and MyGlamm, among others in the beauty and wellness ecommerce industry.