Honasa Consumer, the parent company of personal care brands such as Mamaearth and The Derma Co, said on January 1 that it had raised $52 million in a round led by Sequoia at a valuation of $1.2 billion. The funding boom carries into the new year.
Sofina Ventures SA and Evolvence also participated in the round. Six months after, the company raised $50 million in a funding round led by Sofina Ventures, valuing it at $730 million.
“We will be deploying the funds towards brand launches, expanding distribution, inorganic growth, and expanding the current portfolio across borders,” Varun Alagh, Co-Founder and CEO, Honasa Consumer, said.
While the company said the round also allowed employees to sell their vested ESOP (team member stock options), it did not specify the quantum or how many would benefit from it.
Honasa’s other investors include Fireside Ventures and Stellaris Venture Partners.
Founded in 2016 by the husband-wife duo of Varun and Ghazal Alagh, Mamaearth has emerged as one of the hottest new-age consumer brands in India, riding the so-called direct-to-consumer (D2C) wave, where brands sell to consumers directly from their website or via e-commerce platforms rather than going the traditional and expensive offline route.
It offers over 80 toxin-free, natural products, including bamboo-based baby wipes, face masks, lotions, and hair care products. It also launched a second brand, Derma Co, in late 2019.
Their products have hit an annual revenue run rate of over Rs 500 crore, one of the few new-age consumer brands to do.
It plans to use the funds to expand its portfolio of personal care D2C brands. It recently launched Aqualogica, a hydration-based skincare brand suited for Indian skin and tropical weather.
It will also continue to expand distribution for Mamaearth and The Derma Co and explore strategic inorganic growth opportunities in the personal-care segment.
“Looking at the scale of Mamaearth and success of The Derma Co, we are confident that we have the expertise to build brands with a millennial connect,” Alagh said. “Sequoia, Sofina and Evolvence have unique strengths the in the US, Europe & GCC, respectively, which will help us grow internationally & learn from others in these markets.”
Ghazal Alagh, Co-Founder and CIO, Honasa Consumer Pvt Ltd, said, “The recent round will empower us to fuel our innovation funnel and provide a wider assortment of problem-solving personal care products for millennials.”
According to reports, D2C brands could be worth $100 billion in the next five to seven years as the coronavirus pandemic showed consumers the way to buy online.
D2C brands start by selling their products online and are assisted by other e-commerce marketplaces such as Flipkart, Myntra, and Amazon. Sectors most lucrative for D2C brands include beauty and personal care, food and beverage (F&B), and fashion.
The year 2021 was a blockbuster one for the Indian startup ecosystem, with 43 new-age companies valued at more than a billion dollars. Before 2021, India had just 30 unicorns in all.