Indians are warming up to raise their wellness and beauty quotient as investments in beauty startups more than doubled to USD 108 million till date in 2019, compared to USD 51 million in 2018.
According to a Venture Intelligence report, there is a boom in the sales of makeup, skin, and hair care products, leading to rapid sprouting of new startups in this vertical. India’s online beauty and personal care market is set to cross USD 3.5 billion by 2022, up from USD 300 million in 2017, according to a report by RedSeer Consulting.
Major e-commerce players in the beauty segment in India are Nykaa, Amazon, Flipkart, Myntra, MyGlamm, private label Orange Something from Grofers, and personal hair care brand ‘Bare Anatomy’.
Nykaa raised USD 14 million in April this year, through leading private equity fund TPG Growth, a US-based fund catering to middle market businesses across industries world-wide, leading it to be valued over USD 700 million. The company has raised over USD 100 million since it was founded in 2012. The omni-channel retailer also runs 50 physical stores. On its app it lists over 1,000 brands and records over 30 million visitors per month. Nykaa was India’s first online retailer to stock super premium beauty brands like M.A.C Cosmetics, Bobbi Brown, Estée Lauder and Clinique; along with Korean beauty brands like The Faceshop, Innisfree, and Laneige.
In June this year, MyGlamm, a direct-to-consumer online beauty brand company, also raised USD 14 million led by Bessemer Venture Partners, valuing the company at USD 70 million. Existing investor L’Occitane, a beauty and cosmetics brand, also participated in the round. According to Venture Intelligence, smaller investors like Roots Ventures and Sauce.VC are also placing their confidence in beauty startups.
“With the success of Nykaa, similar companies within the segment are coming up and are seeing investor attention,” Venture Intelligence managing director Arun Natarajan told Economic Times.
Another online beauty retailer, Bare Anatomy offers a range of personalized hair care ranging from products like shampoo, conditioner, hair oil, and hair serum. The fledgling firm has managed to raise a seed funding of USD 500,000 from Sauce.vc. One of the co-founders of Bare Anatomy, Rohit Chawla, an alumnus of Carnegie Mellon University, has also started ‘The Man Company’ a men’s grooming and essentials brand. Apart from Bare Anatomy, Sauce.vc’s other investments in lifestyle concerns are XYXX Innerwear and women’s health drink ‘&Me’ among others.
The beauty vertical in India is also seeing major growth in startups offering salon services like hair cutting, waxing, facials, manicure, and pedicure at home, a space where soon to be unicorn the Gurugram-headquartered home services firm ‘UrbanClap’ dominates. It has trimmed its operations to only two categories, beauty and home, shutting down other earlier interests in wedding services and photography.
According to the company, 40% of its revenues come from the ‘beauty at home’ segment. The startup has on-boarded 20,000 service partners and claims to clock around 30,000 service requests per day. In August 2019, UrbanClap raised USD 75 million in a Series E funding round, led by Tiger Global, with participation from existing investors Steadview Capital and Vy Capital. The startup seeks to cover 30 Indian cities by 2021, along with expansion to countries like UAE, Australia, and Singapore.