Purplle, the Indian online beauty products retailer backed by Goldman Sachs Group Inc., is raising funds at a valuation of $630 million just as rival Nykaa is executing its initial public offering.
Kedaara Capital led the fresh $75 million funding round, Purplle said Friday in a statement. The startup will use the funds to boost innovation in beauty products and wants to multiply its revenue over the coming years. Existing investors Sequoia Capital and Blume Ventures participated in the round.
Purplle competes with bigger Nykaa that’s seeking a valuation of $7.4 billion in its IPO currently under way. India’s e-commerce industry has been on a tear since the start of the pandemic with niche online retailers growing rapidly by catering to the country’s overwhelmingly young online consumers.
The beauty and wellness category is particularly underserved by brick-and-mortar retailers, leaving startups like Purplle a vast runway for growth.
Known formally as Manash Lifestyle Private, Purplle was set up in 2012 by Manish Taneja, Rahul Dash and Suyash Katyayani, three engineers from the Indian Institute of Technology. It has grown its gross merchandise value by 90% annually in the past three years and has 7 million monthly active users.
The startup offers 50,000 beauty products, makeup tools, and accessories from over 1,000 brands on its website and app. “Investors are attracted to the large market size, high gross margins, and very high repeat buying that characterize online beauty retailing,” Taneja, co-founder, and chief executive officer said in an interview.
The former investment banker’s startup targets value-conscious middle-class homemakers in smaller cities like Mangalore, Kanpur, and Coimbatore, who live in households similar to the one Taneja himself grew up in just outside Delhi.
“We go after the middle-class buyers of India,” he said. “We want to be the Robinhood of India’s beauty market.” Like Nykaa, the startup sells products from its own private label.
Indian buyers are increasingly taking to these newer, aggressively-priced brands, many of which tout chemical-free products. The market is heating up with new competition emerging from players such as MyGlamm, backed by Amazon.com Inc.