Startup Stories

Nykaa- A new unicorn in the making

Nykaa, an online luxury beauty retailer has turned out to be an underdog in the Indian beauty market, by achieving a lion’s share of 33% in the online beauty market. The company is founded by ‘Falguni Nayar’, former Managing Director of ‘Kotak Mahindra Capital Company’ who quit her illustrious career in order to become an entrepreneur.

Nykaa today is a one-stop shop for beauty online and has also tried to create an engagement platform for beauty lovers though offerings like Beauty Book-an online magazine, DIY videos on YouTube and a wide fan base on social media platforms.

It is ranked at 381st position as per the website visits & has around 11.97 million total visits.


The company is the brainchild of Falguni Nayar, who saw immense opportunity in the Beauty line through her travelling experiences from all over the world.

Startup Strategy: Despite never having been a big beauty consumer, she would leave with hundreds of dollars’ worth of product, because sales associates showed her the right way to use them. They also recommend the best products from a wide variety of brands without bias—a feat that is beyond single-brand stores. “I wanted to replicate that in India—a multi-brand retailer selling the best beauty, plus a lot of education to help customers,” - Falguni Nayar.

She realized that India had inadequate availability of beauty products, the environment that was needed to buy these products was inadequate here & beauty being a long tail business was difficult to serve without having an online selling mode. Falguni carefully chose the beauty segment, because there was not much competition in the segment unlike the Electronics & Fashion segment. Further, her conviction on the Millennial buying more through the online medium, led to the incorporation of ‘Nykaa’ in the year 2012.

Having experience of more than 20 years as an Investment Banker, Falguni decided to run the business for more than a year as a bootstrap. Later on the company opened up for its maiden fund-raising activity that brought many influential families of India to invest in the company.

Nykaa faced its own set of challenges and had many teething troubles. Although within a month of launching the company, it had on board its dream team. The challenges slowly erupted when the selected team found difficulty in achieving the targets, and with the employees deciding to move on within two years of the company’s commencement of operations. The turnaround for the team came when Falguni’s daughter ‘Advaita Nayar’, returned after graduating from Harvard Business School, and joined the team as the Offline Retail head. The mother-daughter duo worked hard to build a brand in such a short duration & achieve the success the company has today.

Business Model

The company is operating in the Beauty segment with the operations in Fashion & Cosmetics industry. The company offers multi-brand products across categories of Skin care, Hair care, Fragrances, Bath & Body & Luxury products for both men & women. Apart from selling various brands, the company also offers its home-grown beauty products in nail paints, fragrances, make up & shower gel segments. The company has forayed into Kidswear, Accessories & Men’s beauty segment also. The company launched a separate e-commerce platform called as ‘NykaaMan’, focussing on men’s beauty & personal care products.

The company which initially started as an online retailer started functioning with an Omni-channel model in the year 2015. The company currently operates 35 offline stores in India and its physical stores are classified as ‘Nykaa Luxe’ & ‘Nykaa On Trend’. Further, the company has also forayed into designer & premium apparel segment with brands like Ritu Kumar & Masaba through its ‘NykaDesignStudio’. Nykaa has also announced the acquisition of ‘’, a members-only site, wherein the members get their personal stylists who set up specific fashion style which is in line with the member’s profile, taste, size & latest trends.

The company follows an inventory based model and owns warehouses in Mumbai, Delhi & Bangalore. With its E-commerce portal, the company claims to list more than 80,000 products across 700 brands.

Financial Performance

The company reported to have achieved break even in EBITDA in FY 2018 with revenue of Rs 570 Crore & had posted a Net Loss of Rs 28 Crore (a drop of 22% from previous year loss of Rs 36 crore). The company currently is targeting Rs 1200 Crore revenue & is expected to turn profitable in FY 19.

In 2015 the company launched its own in-house brand of beauty care products. This was because the private label brand can generate a margin of around 40-60%, which is 10-20% more than what the company earns by selling the branded products.

Competitive Landscape

Nykaa competes with ‘’ & also faces strong competition from horizontal market places such as Amazon & Flipkart, apart from the offline retailers. Recently, Myntra has started expanding its cosmetics range by including brands over various product categories using a brick & mortar type retail outlet.

Key Fundings

July 2014- Nykaa raised its maiden funding in July 2014, with Series A fund that raised around $3.4 million (Rs 20 Crores) through private investors. The objective was to boost the expansion plans of the company.

October 2015- Through the company’s Series B fund raising, which was led by ‘TVS Shriram Growth Fund’ & ‘Techpro Ventures’, Nykaa raised $9.5 million (~60 Crores) by diluting 20% stake.  The fund raising also included family office of ‘Atul Nishar’ (founder & chairman of Hexaware Technologies) & ‘Harsh Mariwala’ (chairman of Marico).

September 2016- Nykaa raised Rs 82 Crore ($12.3 million) in a Series C funding for opening 30 new physical stores. The issue was led by Hero Company’s ‘Sunil Munjal’ & Marico’s ‘Harsh Mariwala’.

December 2016- Max Ventures put in around Rs 16 Crore investment in Nykaa, for 1.99% stake.

April 2018- Nykaa raised Rs 170 crore in a mix of primary & secondary transactions that brought in in its 4th round of Series D fund raising. The fund raising brought about Rs 95 Crore for its existing shareholders and infused Rs 75 Crore (above $11 million) in the business, valuing the company at Rs 30 billion. The round was led by Marico’s Mariwala family office & ‘Dalip Pathak’ (special limited partner at Warburg Picus) . The new investor’s entry marked the partial stake selling of 3 old investors including TVS Capital.

September 2018- Nykaa went on to raise Rs 1.6 billion through primary & secondary share sale, in which ‘Lighthouse India Fund III Ltd’ invested Rs 1.13 billion in the company. With this transaction, ‘TVS Shriram growth’ fund exited from the company. The capital was raised in order to expand the company’s footprints to 90 offline stores by the year 2020.

Mar 2019- Nykaa raised Rs 100 Crore (~$14 million) as primary capital from ‘TPG Growth’, a Singapore based investment firm at a valuation of around Rs 5000 Crore (~$750 million).The raising aims at pushing the company’s new initiatives like Nykaa Man, fashion & apparel categories apart from expanding the company’s offline stores from 35 at present to 70 by March 2020.

Future Plans

Nykaa apart from rapidly expanding its offline presence is also eyeing an IPO by the year 2020, but the company might not go public in case ‘Soft Bank’ agrees to invest $200 million in the company.

The company recently added full fledged "fashion app and website" to its forte and is a huge step into diversification as Nykaa's year long research suggested a category of women who aren't attracted to the beauty app and instead prefer to shop online for fashion only. Ms. Falguni's daughter Adwaita Nayar has joined to help with the heavy lifting after finishing studies at a B-school in US.

To know about our investment advisory services and to place your inquiries: Drop us a mail at -  or  Visit

Disclaimer: The report only represents personal opinions and views of the author. No part of the report should be considered as recommendation for buying/selling any stock. The report & references mentioned are only for information of the readers about the industry stated.

Happy to receive feedback in the comments section.

0 Responses

Leave a Reply

Your email address will not be published. Required fields are marked *


Recent Post

Have Any Question?

Do not hesitate to contact us. We’re a team of experts ready to talk to you.

+91 99882 75566

Connect With Us