Personal care brand Mamaearth has raised $50 million from European investment firm Sofina Ventures SA and Sequoia Capital. The round also saw secondary sales by early investors like Fireside Ventures, Stellaris Venture Partners, Sharp Ventures, and Titan Capital. Mamaearth, as per filings to the companies registrar, has already secured Rs 147 crore and the remaining capital will come in tranches. The firm had posted net sales of Rs 109.7 crore for the fiscal year 2019-20 as against Rs 16.8 crore a year before. It is yet to achieve operational breakeven, as per VCCEdge.
Mamaearth plans to deploy the funds to drive brand growth through aggressively expanding its offline distribution and explore inorganic growth opportunities in beauty and personal care. The fund will also help amplify the process and strengthen the D2C and offline expansion of Mamaearth and further accelerate the growth of The Derma Co., which is already showing early signs of success since its launch in 2020 according to Varun Alagh, co-founder and CEO, Mamaearth. The company also plans to explore inorganic growth opportunities in the beauty and personal care segment.
Founded in 2016 by husband-wife duo Varun and Ghazal Alagh, Mamaearth has emerged as one of India’s hottest new-age consumer brands, riding the so-called direct-to-consumer wave, where brands sell to consumers directly from their website or via e-commerce platforms, rather than going the traditional and expensive offline route. It offers more than 80 toxin-free, natural products, including bamboo-based baby wipes, face masks, lotions, and hair care products. It also launched a second brand, Derma Co, late last year. Mamaearth products are available on its website, app, and major e-commerce platforms such as Amazon, Nykaa, Flipkart, and over 12,000 stores across the country.
“Mamaearth has an audacious goal of disrupting the $25B personal care industry by using technology across the three key pillars of FMCG – product, marketing, and distribution. They have established themselves as a clear market leader in the digital-first brands’ space by providing consumers a refreshing bouquet of toxin-free products,” said Ishaan Mittal, Principal at Sequoia India.
The broader beauty and personal care segment have seen multiple investments this year. In June, Marico, which sells Parachute hair oil and Saffola cooking oil, picked up a majority stake in a D2C personal care brand, and earlier this year, private equity firm ChrysCapital acquired a stake in Wow Skin Science. SUGAR Cosmetics, The Man Company, The Moms Co., Plum, Dabur, Patanjali, and ITC are a few competitors in the cosmetic and skincare market.
Mamaearth is also trying to snap up several smaller startups in the personal care and wellness category to create a ‘House of Brands’ and is planning to use the money for acquisitions as well. The strategy is similar to the so-called Thrasio models, which have been increasingly popular in India recently.
Categories: Venture Capital