Nykaa IPO: Ex-Banker Gets Her Turn as Billionaire Makeup CEO

Bloomberg Quicktake: Now published this video item, entitled “Nykaa IPO: Ex-Banker Gets Her Turn as Billionaire Makeup CEO” – below is their description.

Nykaa, the brainchild of owner Falguni Nayar, has grown into India’s top e-commerce site for makeup and beauty products, with the endorsement of Bollywood stars and a fervent following among twenty-somethings. The startup, formally known as FSN E-Commerce Ventures Ltd., filed preliminary documents for an IPO, which Bloomberg News has reported could value the business at more than $4 billion.

One idea Nayar picked up from her time working with entrepreneurs was the importance of a motivating business mission. With Nykaa, she saw the opportunity to help India’s women look after themselves, moving away from the country’s traditional deference to men.

“I was inspired by those die-hard founders,” Nayar said in a recent interview over Zoom from her home in Alibaug. “Our message to women has been that the spotlight of her life should be on herself. You are important in your story and should feel no guilt at being center stage.”

The message resonated. Founded in 2012, the Mumbai-headquartered startup now offers more than 2,500 brands of everything from mascara and makeup remover to velvety kohl Indian eyeliner and the body tattoo art called mehendi. Through its websites, apps and 70-plus brick-and-mortar stores, the company hit revenue of 24.5 billion rupees ($330 million) in revenue and other income in the fiscal year ended in March, according to its filing. That figure rose by more than 35% during that period, despite pandemic-mandated store closures and delivery challenges. The startup is profitable.

If the IPO goes as planned, Nykaa will be India’s first women-led unicorn to go public. Nayar owns about half of the company with her husband and their twin children, meaning the value of their stake could exceed $2 billion if the startup reaches or surpasses initial projections.

Nayar founded the company nine years ago, figuring if she was going to start a business it had to be before she turned 50. “The point of no return,” she said.

The name she picked is derived from the ancient Sanskrit word for heroine.

Nayar had seen that in the West entire floors of high-end department stores were dedicated to cosmetics and other beauty products. But millions of Indian women still had to visit dingy neighborhood “bangle” or “variety” stores for their beauty needs.

Nayar’s goal was to create a slick, integrated shopping experience where consumers could shop online or in physical stores, depending on what they were looking for with that particular visit. They could visit one of Nykaa’s colorfully stocked specialty outlets to, say, try on lipsticks or eyeshadows. Online, they could get tutorials, including from celebrities like Janhvi Kapoor or Debasree Banerjee.

Nykaa resisted cutting prices to lure buyers, in contrast to other e-commerce startups.

From 60 daily orders at launch, sales climbed to more 1,000 orders within months. Nykaa built on its momentum by customizing products for Indian skin tones, skin types and local weather. It launched an array of nail colors, now up to 2,700 shades. It also initiated shoppers to make-up basics, such as foundation, and now offers 1,500 shades. Nykaa’s own range of lipsticks have fun Indian names such as Maharani (wife of the maharaja) and Mishti (sweet person).

Competition is rising. Giants like Amazon.com Inc. and Walmart Inc.-controlled Flipkart Online Services Pvt. are expanding in the $15 billion beauty market, along with specialty retailers such as LVMH’s Sephora. Local rival Purplle landed backing from Goldman Sachs Group Inc.

Nykaa’s strategy has been to build on its lead by investing in technology, marketing and product extensions. Its online services use algorithms to recommend products based on what customers have bought before, much like Netflix Inc. recommends movies.

Nykaa has expanded to three separate apps, including, most recently, an app for men’s products.

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