source: YourStory.com
Lighthouse India Fund III Limited, an affiliate of consumer-focused private equity manager Lighthouse Advisors, has invested Rs 113 crore in beauty retailer Nykaa for a minority stake through a secondary share sale.
Mumbai based Nykaa.com is the brainchild of investment banker turned entrepreneur, Falguni Nayar (Ex-Kotak Mahindra MD).
The secondary share transaction by Lighthouse Advisors gives a complete exit to TVS Capital Funds which had invested about Rs 30 crore in Nykaa across 2015 and 2016 through its TVS Shriram Growth Fund.
TVS is expected to have raked in an attractive exit pegged at over 4 times its investment, according to market sources familiar with the fund’s investment. The fund had first made a partial exit in Nykaa’s previous capital raise in 2016.
“Our second fund is coming to a close so it was a logical decision to exit at this stage for us. Nykaa has been a stellar bet for us reflective of the entrepreneurial ability of a seasoned professional like Falguni Nayar,” said Gopal Srinivasan, founder & chairman of TVS Capital Funds.
Nykaa owns the lion’s share of the online beauty market at 33% and has been growing at a strong pace, having clocked ₹570 crore in net revenue in FY18 from ₹214 crore a year earlier. The firm also claims to be EBITDA positive for the last two quarters and is on track to grow 100% in revenues in FY19, potentially taking it beyond the Rs 1000 crore revenue mark.
According to Red Seer Consulting, The market size of the online cosmetics market in India was Rs. 1000 Cr in 2017 and it is expected to reach Rs. 10,000 Cr in 2025.
Nykaa is looking to expand its portfolio with the launch of exclusive brand partnerships and increasing its offline footprint to 90 stores by 2020.
“We believe Lighthouse will bring to bear their expertise in the retail sector propelling Nykaa to even greater heights. As we add new verticals and product categories we will continue to build on meaningful experiences that engage and delight our customers,” said Falguni Nayar, founder & CEO of Nykaa.
The firm has launched a slew of new products and initiatives including Nykaa Design Studio, a curation of premium Indian fashion designers, Nykaa Man – a men’s grooming offer, Nykaa Pro – a portal for professional beauty consumers and Nykaa Network – a community for encouraging consumers to engage and create beauty conversations in the recent past.
Nykaa hosts over 1000 brands on its platform with a customer repeat rate of over 60%.
This is as per a report in the Economic Times.