IBEF: January 09, 2020
Mamaearth, an FDA-approved personal care brand, has raised Rs 130 crore (US$ 18.60 million) in a third round of institutional funding led by Sequoia India, with participation from existing investors, Fireside Ventures, Stellaris Venture Partners and Sharp Ventures. Thus, the total funds raised by the Mamaearth has reached a total of US$ 23 million to date.
The company witnessed exit from two early angel investors in this round, with a return of over 20X on their initial investment, the company said.
The company was established in 2016 by husband-wife duo, Varun and Ghazal Alagh. It claims to be Asia's first Made-safe certified brand that offers 100 per cent toxin-free and natural skin care, hair care and baby care products. There are currently over 80 natural, toxin-free products included in the company portfolio which have been used by 1.5 million plus consumers in over 500 cities across the country. Alongside its own platform, www.mamaearth.in, Mamaearth products are also available across major e-commerce platforms such as Amazon, Nykaa and Flipkart. The brand is also expanding its horizon by entering offline channels and so far, has established a presence in over 2,000 multi-brand stores across 40 cities in the country.
"Across India, millennials are becoming increasingly conscious and are looking for safe natural alternatives to replace the existing cosmetic products offered by large multinationals. Mamaearth is catering to this growing demand. We plan to use the fresh funds to build Mamaearth into a Rs 500 crore (US$ 71.54 million) brand, by acquiring 5 million new customers over the next three years. We crossed Rs 100 crore (US$ 14.31 million) in the revenue run rate last October and are currently at a Rs 150 crore (US$ 21.46 million) run rate. We plan to ramp up our team from 100-plus at present to 250-plus in the next two years, with a few CXO level hires in the next 12 months, and also a foray into the international market -the ASEAN cluster of markets excites us the most," said Mr Varun Alagh, founder and CEO of Mamaearth.
The funds will also be utilised to introduce sub-brands under Mamaearth in categories such as color cosmetics and bamboo-based diapers, along with the launch of more new brands focused at other opportunities for millennials under the Honasa Consumer Pvt Ltd umbrella, which is the parent company of Mamaearth, said Mr Alagh.
"Online channels contribute just 3-5 per cent of India's US$ 15-billion-plus personal care market. With 15-20 per cent of Indian shoppers influenced digitally and expected to double in the next 7-8 years, digital-first brands have the potential to redefine the architecture of tomorrow's FMCG companies. Varun's vision is to ride these market tailwinds to create a multi-brand, cross-geo, FMCG company over the next decade. The team at Sequoia India is excited about being partners in this phenomenal journey," said Mr Ishaan Mittal, Principal, Sequoia Capital India LLP.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.