As the Covid-19 pandemic stifled enterprises from airways to tourism, Nykaa, an on the web retailer of natural beauty solutions, was sitting down fairly. Hordes of consumers, trapped at residence thanks to pandemic-imposed constraints, flocked to its digital cabinets, buying up every thing from skin lotions to lipsticks. Thanks to this revenue surge, Nykaa expects to report a 40% increase in profits for the yr ending March 2021, up from $247 million in March 2020.
The cosmetics retailer, which counts Boston asset administration enterprise Fidelity Management and private equity firm TPG Expansion Money among the its buyers, is prepping for an IPO this year that’s envisioned to value it at all-around $3 billion. But even just before that comes about, Nykaa’s most current funding round, which is envisioned to shut by the end of this thirty day period, is most likely to propel its founder Falguni Nayar into the billionaire ranks, earning her India’s second-richest self-made lady immediately after biopharma billionaire Kiran Mazumdar Shaw.
Nayar, who owns a minimal a lot more than 50% of the elegance retailer, would not comment on her net value or the fund-raising.
The Indian splendor and personal care current market is anticipated to develop to $23 billion by 2023 from $13 billion in 2018, according to Gurgaon-primarily based consulting business Technopak, which says it will be boosted by mounting incomes of young Indians.
“Nykaa has develop into synonymous with beauty goods,” states Saloni Nangia, president of Technopak. “It spotted the right craze due to the fact we never ever experienced a consolidated elegance perform in India before. There were constantly quite a few formats, but they were all little-scale.”
Nayar, a previous banker, commenced Nykaa at age 49, immediately after quitting her work as head of Kotak Mahindra bank’s financial commitment banking arm in 2012. With $2 million as seed funds from loved ones cost savings, she imagined the time was ripe for an Indian edition of Sephora, the global cosmetics chain.
Starting up off as an on the internet retailer, Nykaa, which is derived from the Sanskrit term “Nayaka,” meaning 1 who’s in the spotlight, expanded later into brick and mortar shops. The firm now has 70 outlets throughout 34 cities and its web-site and app draw 60 million regular people.
Nykaa disrupted India’s attractiveness industry by offering luxury manufacturers these types of as Clinique and Bobbi Brown on the web. By sourcing items straight from approved distributors, Nykaa constructed a status of top quality and authenticity in a sector rife with spurious cosmetics. The on line model permitted Nayar to produce an countless aisle of solutions from across the globe, Nykaa at present gives more than 700,000 goods.
Nayar has shunned discounting and used advertising and marketing methods these as attractiveness weblogs by influencers who supply updates on new goods and trends. Noticing that customers like to touch and sense and test on cosmetics before acquiring them, she additional bricks to clicks, opening the to start with Nykaa retailer in Delhi in 2015.
Nykaa, which became a unicorn last calendar year, has so much elevated a total of $70 million in major funding from marquee investors, including shopper items billionaire Harsh Mariwala and commodities billionaire Harindarpal “Harry” Banga.
“It has been impressive looking at Nayar changeover seamlessly from one particular of India’s top financial investment bankers to a phenomenal entrepreneur in the attractiveness, style and engineering house,” says Angad Banga, son of Harry Banga, whose Hong Kong-based mostly family office retains a 10% stake in Nykaa. (Angad employed to perform at KKR with Nayar’s spouse Sanjay Nayar, who heads the American personal equity firm’s India unit.)
Nayar’s entrepreneurial journey has been significantly from sleek. She faced a large studying curve as she navigated the worlds of splendor, tech and retail. 3 chief technology officers quit in the very first four yrs. Despite staying a banking veteran, fund-raising was a challenge initially—a considerably cry from the current circumstance that sees Nayar becoming wooed by financial investment banking institutions seeking to record her business enterprise.
Today, she’s also experiencing off a raft of opponents, these types of as office retail store chain Purchasers Prevent, controlled by billionaire Chandru Raheja, and Amazon, which has created a formidable on the web presence in India. But Nayar, whose loved ones has constantly supported her elegance enterprise, has both equally her 30-calendar year-outdated twins doing the job with her. Son Anchit heads the online business and daughter Adwaita, who used to be Nykaa’s main running officer, is CEO of its speedy-climbing clothes retailer Nykaa Fashion.
To incorporate excitement to its choices, Nykaa forged a joint venture with Bollywood actress Katrina Kaif referred to as Kay Elegance in 2019, to provide a new cosmetics line. Technopak’s Nangia predicts that India’s booming attractiveness company isn’t waning anytime soon.
“Digital acceleration brought about by Covid-19 is below to continue to be,” she states. “All magnificence goods and wellness providers are likely to gain.” Nayar will have to get used to becoming in the highlight.