“With ENN, we will enter the skincare category and we expect it to grow exponentially over the next 12-24 months,” said Vineeta Singh, cofounder of Sugar Cosmetics. “The company is expected to achieve Rs 100 crore in annualised revenues over the next 12-18 months.”
Well-funded startups in the segment, such as Good Glamm Group,
and Purplle, have been on a buying spree over the last 12 months to bolster their presence in one of the fastest growing direct-to-consumer (D2C) segments.
Sugar Cosmetics, the beauty and personal care brand which is backed by Elevation Capital,
had raised $21 million in Series C funding in March last year. According to sources, the company is in talks to raise $75-80 million in a new funding round that would value it at around $500 million.
ENN Beauty’s founder Nandeeta Manchanda will work closely with the founders of Sugar.
“We had competing offers but the partnership with Sugar gives us immediate access to the market and the infrastructure that they have built, which would have taken us a longer time to build,” said Manchanda. “This association will also help ENN Beauty in further strengthening and evolving their product range.”
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The Indian beauty industry has seen remarkable growth in the last 12-18 months. According to a recent RedSeer report, the beauty and personal care industry in 2020 was valued at $16 billion and expected to grow at 12% per annum to $28 billion by 2025.
The last two years have seen an explosion in high-quality beauty and skincare products at a value-for-money range, higher exposure to social media trends, affluence among India’s young and accessibility to new-age brands that have helped expand demand for both local and foreign brands, the report said.
“Over the past decade, the beauty industry has evolved and undergone a sequence of changes owing to the close attention brands are now paying to the evolving needs of the consumer,” Singh said. “In today’s day and age, consumers develop an affinity towards brands that not only sell a product to make them look beautiful, but also something that reflects their diverse personality and individuality.”
“We were in talks with ENN Beauty for the last two years and now the deal has come to fruition,” she said.
With this association, ENN will be able to leverage a digital audience of over 50 million beauty enthusiasts while it ramps up its retail presence to 100-plus outlets by the next financial year. The team will also look at re-strategising on the brand product’s average selling point to make it more accessible and desirable to women from tier-II and III markets as well, the company said.
Sugar’s current revenue run rate stands at Rs 500 crore and is expected to reach Rs 2,000 crore over the next 24-36 months,” Singh said, adding that the company will opportunistically look at acquisition opportunities and will continue to grow organically.