Lighthouse invests Rs 113 Cr in beauty ecommerce firm Nykaa for a secondary stake

Lighthouse India Fund III, an affiliate of Lighthouse Advisors, on Wednesday announced that it has invested Rs 113 crore to acquire a secondary stake in Nykaa, the Mumbai-based beauty ecommerce platform. 

With this investment, existing investor TVS Shriram Growth Fund has exited the company. The fund had invested in Nykaa in the Series B and C rounds in 2015 and 2016. 

The beauty ecommerce platform had raised Rs 160 crore through primary and secondary share sale earlier this year. 

Nykaa is now looking to expand its portfolio with the launch of exclusive brand partnerships and increasing its offline footprint to 90 stores in India by 2020. It has also introduced new verticals including Nykaa Design Studio, a curation of premium Indian fashion designers, Nykaa Man - a men’s grooming offer, and Nykaa Pro - a portal for professional beauty consumers. 

This March, it also launched Nykaa Network -- a community for encouraging consumers to engage and create beauty conversations. In a press statement, Falguni Nayar, Founder and CEO, Nykaa said,

“As we add new verticals and product categories we will continue to build on meaningful experiences that engage and delight our customers.” 

Nykaa claims to have touched revenues of Rs 570 crore for FY17-18 and has been EBITDA positive for two quarters in the row. It also claims to be on a path to 100 percent revenue growth in the current financial year. Launched in 2012 by Falguni, who was Managing Director of Kotak Mahindra Capital Company previously, Nykaa aims to be a one-stop destination for online shoppers looking for personal care and cosmetics items.

Nykaa follows an inventory-led model, with inventory spaces in Delhi, Mumbai, and Bengaluru. The Mumbai-based company claims to provide over 850 brands including M.A.C, Bobbi Brown, Clinique, and Estee Lauder among others. Its luxury vertical contributes to 10 percent of Nykaa’s total revenue.

In 2015, Nykaa launched its own private label, an essential tool to attain profitability in ecommerce. Around the same time, Nykaa also tried its luck with omnichannel model by opening brick and mortar stores - with curated, best-selling products under ‘Nykaa On Trend,’ and luxury brands under ‘Nykaa On Trend.’ Altogether, there are 17 Nykaa stores now, and they plan to make it 55 by the end of FY2019.

Speaking of the fundraise, Sean Sovak, co-founder of Lighthouse, said in a press statement 

“What Falguni and team have created is nothing short of brilliant, completely disrupting the personal care market in India, by focusing on ease of access and superior customer experience. We are excited by the opportunity ahead for the company.”