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Beauty, wellness start-ups rediscover their mojo

Private equity investors and venture capital firms seem to have rediscovered their beauty spot.

A day after PE firm TPG Growth invested about 100 crore in beauty retailer Nykaa, Samara Capital has acquired about 50 per cent stake in cosmetics company Blue Haven (BH) for an undisclosed amount. This is also Samara’s second investment in the beauty and wellness segment this year after it announced that it will pump in 200 crore into skincare and haircare brand Nature’s Essence.

According to sources, JSW Ventures-backed online beauty products marketplace Purplle is all set to raise a substantial amount in Series B flunding ater this week. The Mumbai-based start-up had raised about $2.57 million last year. Founded in 2011 by Manish Taneja and Rahul Dash, Purplle is an ecommerce platform that offers beauty products and beauty appliances and is a direct competitor to Nykaa, founded by Falguni Nayyar, in 2012.

Changing trend

Lately, there has been a renewed interest among investors towards the Indian beauty and wellness start-ups even as the segment witnessed a dip in investments in 2018. According to data from Tracxn, Indian beauty and wellness start-ups raised about $21 million in 2018, a steep decline from $209 million in 2017.

However, the trend has changed in the last few months. Earlier this year, luxury ayurvedic beauty and wellness brand Kama Ayurveda also recieved investments from Spanish Fragrance maker Puig.

Unilever Ventures has in the last few months invested in two skin care start-ups — Plum and Pureplay Skin Sciences — that speaks volumes about the potential the Indian beauty and wellness market has in store.

The Indian beauty segment is an $8-billion market, which is growing at the rate of 22 per cent year-on-year. According to an Assocham– joint study report released last year, the segment is expected to touch $35 billion by 2035.

Focus on men

According to experts, growing awareness about brands due to e-commerce, rise in purchasing power, increasing number of women in workforce and rising consciousness among men are the main driving factors in the segment.

More men want to look presentable, and hence, are looking for grooming products. This has also led to a surge in he number of start-ups and companies focussing on men’s beauty products. To cash in on the trend, Marico acquired Ahmedabad-based Beardo in 2017. Nykaa has also launched Nykaa Men, which offers a range of men’s grooming products from different companies.