One of the husband-wife duo Kaushik Mukherjee and Vinita Singh who founded Sugar Cosmetics, Vinita Singh was a ‘shark’ on the viral series Shark Tank India. Now she is in talks to raise more than $50 million in just one year at a valuation of 5 times around $500 million. An expert in this matter gave this information on the condition of anonymity. The round to raise funds will be led by L Catterton Asia, a partner investment firm of Louis Vuitton Moët Hennessy (LVMH). It manages more than $30 billion in assets globally.
The deal will be the first for a new investor in India, private equity firm L Catterton. Last year, the firm hired Anjana Sasidharan from Sequoia Capital India to lead investments in India and Southeast Asia.
Sugar Cosmetics declined to comment, while L Catterton did not respond to questions.
Sugar currently sells lipsticks, eyeliners, face and eye brushes and has recently expanded into the skincare segment. Apart from this, it is selling moisturizers and sheet masks. It currently has an annual revenue of around Rs 320-350 crore or a net revenue of around Rs 27-30 crore per month, sources said.
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These deals and rising sugar valuations reflect a sharp increase in consumption as well as funding for new-age beauty and personal care brands. These are brands that start selling online and take advantage of social media word-of-mouth, online trends and the Internet to grow their business. After that expand offline as well.
Such direct-to-consumer (D2C) brands that raised $2 billion in funding last year have tripled year-on-year as they switch to online options during the COVID-19 pandemic.
However, the rise in online brands has also pushed up digital advertising costs. Google and Facebook have started charging these internet companies higher rates for advertising on their platforms. The customer acquisition cost for these brands has increased by 30-40 per cent in the last 18 months, he added.
“Sugar has created a good range of products and has become a niche brand. When a lot of new brands are emerging, they have to maintain their distinct identity. Since advertising online is more expensive for everyone, they have to find new ways to attract and keep customers. The founder of a personal care brand said requesting anonymity.
According to sources, new lipstick brands like Renee, Belora and Gush Beauty operate on a fraction of the sugar scale and compete with it.
CEO Vinita Singh has gained new fame as a shark/investor in the entrepreneurship show Shark Tank. Singh has over 500,000 followers on Instagram and Twitter, of which more than 80 percent have started following him in the last three months. At the same time, Sugar has about two million followers on social media, which are mainly on Instagram.
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