
Indian TPG-backed cosmetics player Nykaa gets $13m

Nykaa, an online retailer of cosmetic and fashion products in India, has raised INR1 billion ($13 million) in a funding round led by Steadview Capital.
Steadview is an existing investor in the company. Previously, Nykaa raised the same amount in a funding round led by TPG Growth, a growth equity fund managed by TPG Capital. According to AVCJ Research, other private equity investors in the firm include Sharrp Ventures, Techpro Ventures, and Lighthouse Partners.
Falguni Nayar, Nykaa's founder and CEO, is also related to Sanjay Nayar, KKR’s head for India. The latter has invested in the company in a personal capacity.
Founded in 2012, Nykaa runs an e-commerce platform selling cosmetic, haircare, fragrance and wellness products as well as appliances. It sources inventory from third-party brands and manufactures its own products as well. The company operates a 67-store network present mostly in malls in more than 30 cities. Last year, it acquired 20Dresses, an online retailer of clothes, footwear and handbags for women.
Nykaa claims to be profitable but has closed all retail stores, offices and warehouses in order to comply with a three-week nationwide shutdown order imposed by the Indian government due to the coronavirus pandemic. The fresh capital is expected to be used to support the company’s operations, especially as it plans to launch stores selling Nykaa-branded clothes later in the year.
“Nykaa has transformed the beauty industry in India and has established a very strong brand. We believe the company is poised for a strong growth trajectory in the years to come. The company’s focus on customer service and capital efficiency stands out in the Indian e-commerce space,” said Ravi Mehta, founder of Steadview Capital, according to a statement.
Other start-ups in the country with a similar focus on facilitating beauty-related e-commerce include Purplle and MyGlamm, which are backed by Verlinvest and Bessemer Venture Partners, respectively. Indian consumers can also order cosmetic products on platforms like Amazon, Flipkart and Snapdeal. Further, Nykaa Fashion competes with other dedicated portals like Myntra and AJIO, the online marketing channel for Reliance Retail, the retail arm of conglomerate Reliance Industries.
Steadview is an India-focused hedge fund manager founded by Mehta in 2008. Recent private equity activity by the fund manager includes investments in BharatPe, a digital payment services provider, Unacademy, an educational learning platform, and route optimization software provider Loginext.
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