Nykaa is an Indian e-commerce startup based in Mumbai and started by Falguni Nayar in 2012. It provides beauty, wellness, and fashion products online, on mobile apps, and in 84 physical locations. It was the first unicorn business in India to be led by a woman in 2020. Nykaa distributes products that are made both in India and around the world. The company transitioned from an online-only to an omnichannel model in 2015, and began selling things other than beauty. It will sell over 2,000 brands and 200,000 products across its channels by 2020. Nykaa was launched in April 2012 by Falguni Nayar, a former managing director at Kotak Mahindra Capital Company. It began as an ecommerce service that curated a selection of beauty and health products. Nykaa is derived from the Sanskrit word nayaka, which means “actor” or “one who is in the spotlight.” The website was first introduced around the time of Diwali in 2012, and it became commercially available in 2013.
The company transitioned from an online-only to an omnichannel model in 2015, and began selling fashion items. Nykaa Man, India’s first multi-brand internet store for men’s grooming, will start in October 2020. Nykaa Design Studio, which was later renamed Nykaa Fashion, was the company’s first foray into the fashion industry. Nykaa released Nykaa PRO in 2020. It’s a premium membership programme that gives Nykaa App users exclusive access to professional beauty products and deals. Nykaa Fashion will open its first store in Delhi in December 2020, making the fashion industry multichannel.
Fundraising and first public offerings
Nykaa has raised money through numerous rounds of fundraising since 2012. It raised 100 crore (US$13 million) from Steadview Capital in March 2020, making it a unicorn startup worth 85 billion rupees (US$1.1 billion). Steadview followed up with another 67 crore (US$8.8 million) fundraising round in May 2020. Through secondary finance, two Bollywood actresses invested in the company. Alia Bhatt invested 4.95 crore (US$650,000) in July 2020, and Katrina Kaif invested 2.04 crore (US$270,000) in 2018. Fidelity Investments, a worldwide asset management organisation, invested in the company in November 2020 after purchasing shares from an existing equity investor.
On October 28, 2021, Nykaa launched its initial public offering (IPO) with a price range of $1,085-1,125 per share. The IPO raised $5,352 crore (US$700 million) at a valuation of US$7.4 billion after being oversubscribed 81.78 times. Nykaa went public on the NSE and BSE on November 10, 2021, with an opening day price increase of 89.2 percent, valuing the firm at over US$13 billion. Falguni Nayar, the company’s founder, became India’s wealthiest self-made female billionaire with a 53.5 percent share.
Aveda salons to be opened by Nykaa and Estee Lauder
AvedaX Nykaa-branded luxury unisex hair care salons will be launched in India by beauty retailer Nykaa and ELCA Cosmetics Private Limited, an India affiliate of global beauty business Estee Lauder Companies. Aveda is a vegan hair, skin, and body care line that is part of the Estée Lauder Companies Inc. in New York. Aveda’s hair and body care products have been available on Nykaa’s online platform since 2018 and are distributed by ELCA, which sells Estée Lauder’s numerous brands. The salons will be launched by ELCA Cosmetics Private Limited and FSN Brands Marketing Private Limited, a subsidiary of FSN E-Commerce Ventures Limited, which operates Nykaa.
Nykaa’s entry into India’s fragmented wellness and beauty services sector, which is peppered with regional chains, is significant. “We feel that India has yet to experience a significant premiumization in the main beauty categories. We’ve seen that happen to a degree in skin care, but it hasn’t happened yet in hair care. As a result, we believe Aveda is the appropriate brand to lead the premiumization of hair care in India,” said Nykaa’s chief executive, e-commerce beauty, Anchit Nayar. In Bengaluru, the first Aveda X Nykaa salon will open. By creating and extending Aveda’s exclusive network of salons while utilising Nykaa’s understanding of the Indian consumer, the salons hope to create new industry standards, according to Nykaa. Besides that, Aveda plans to launch three salons in Delhi-NCR and Mumbai this year. Both firms refused to reveal their investment figures.
“We believe we have a right to win because wellness and services are the inverse of our existing business.” Because of our industry experience, we have a significant and devoted customer base. We believe that the hair care industry, in particular, was ripe for disruption, both in terms of services and product sales “Nayar stated.
“It’s done between the Nykaa team and The Estee Lauder Companies’ team—we go through everything from design to training to brand implementation,” said Rohan Vaziralli, general manager, ELCA Cosmetics. Simply said, The Estee Lauder Companies will handle all aspects of brand equity, while Nykaa will handle all aspects of consumer and retail.”
