#InTheSpotlight: Nykaa – India's first woman-led unicorn is set to go public

Nykaa has filed its papers with SEBI to raise around Rs 4,000 crore via an IPO.

Mumbai-headquartered e-commerce company Nykaa is all set to go public. In a historic move, ex-banker Falguni Nayar’s firm has filed its draft papers for an initial public offering (IPO) and the unicorn is looking to sell about 10% of the equity, raising approximately $500 million.

The IPO could value Nayar’s startup at over $4 billion. This is the unicorn’s incredible journey.

How it began

When Nayar – a former managing director at Kotak Mahindra Capital Company – was nearing 50, she decided to change gears, reinvent herself and become an entrepreneur. She wanted to dedicate at least 10-15 years of her working life towards something greater.

The widespread interest in the makeup and beauty industry at the time made her venture into the online cosmetics industry.

“A lot of entrepreneurs believe in something ahead of the times, and they build it out against popular belief,” Nayar said during an interview with ET Now. “I wanted to do the same.”

With that vision, she went on to start Nykaa – launched as an e-commerce portal with a range of beauty and wellness products – in 2012.

The journey

From pretty much the first day of its launch, Nykaa began receiving 20 orders a day, which slowly grew to 100 and then 500. Today, the company clocks 13,00,000+ orders a month with 55,00,000 monthly visits globally.

In 2015, the company realised the need for physical stores and thus adopted an online-offline approach. Now it is one-stop online cosmetics and beauty store and also has over 70 offline stores in 38 cities in India.

The movement towards physical stores, according to a Techstory report, has brought about a change in how people perceive the brand. Moreover, this has enabled the brand to reach a group of people they were never able to reach otherwise.

In 2018, Nykaa decided to expand, launching its fashion vertical and then a men’s grooming platform a year later. “Consumer adoption of beauty has really gone through the roof,” Nayar said in a 2019 interview. “It’s not a push strategy – it’s more about educating the customer and the customer wanting it.”

Funding rounds

The company raised $3.4 million in Series A from private investors in July 2014 followed by a Series B round of another $9.5 million in October 2015 led by the TVS Shriram Growth Fund.

Its Series C came a year later, in September 2016, when the e-commerce platform raised $13.5 million. Series D of $24 million was closed in May 2018.

In September of the same year, Mumbai-based PE firm Lighthouse invested $15.7 million.

In March 2019, the online fashion and beauty products retailer raised another $14.4 million from private equity firm TPG Growth Capital post which its valuation rose to $724 million.

Turning a unicorn

During the Covid-19 pandemic, when companies all over had taken a hit due to the imposed lockdowns, Nykaa overnight made a pivot towards being an essentials-only online store.

For that, the company made use of its physical locations to do hyperlocal delivery. With this move, the company also launched a new category of hygiene essentials: hand wash, sanitiser, masks, and so on.

“We would match the products ordered online with what was available at the store to deliver to the nearest pin code,” Nayar told Fortune India during an interview.

In May 2020, the company raised $8.9 million from Steadview Capital at a valuation of $1.2 billion, thus turning into a unicorn amid some difficult times.

Then, in November 2020, Nykaa raised funds from the Boston-based asset management company Fidelity Management & Research Company and through the investment, some of the company’s employees also sold their ESOPs.

IPO dreams

Nykaa on Tuesday (August 3) filed its draft red herring prospectus with SEBI for an initial public offering (IPO).

The IPO comprises a fresh issue of equity shares worth Rs 525 crore and an offer for sale of 4,31,11,670 equity shares by the selling shareholders.

The company will use these funds to invest in certain subsidiaries – FSN Brands or Nykaa Fashion – set up new retail stores, for capital expenditure, repayment of the debt, and enhance the visibility and awareness of its brands.


Amanat Khullar oversees content and editorial at ADIF.

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