Falguni Nayar gets her turn as billionaire startup CEO with Nykaa IPO

For a long time, Falguni Nayar guided the founders of Indian businesses through roadshows in Europe and the US as they built their way to inventory market debuts. Now the previous expense banker is steering her very own startup to an historic preliminary general public presenting.

Nykaa, her brainchild, has grown into India’s major e-commerce web-site for beauty products and solutions, with the endorsement of Bollywood stars and a fervent adhering to amongst 20-somethings. The startup, formally recognised as FSN E-Commerce Ventures Ltd., submitted preliminary paperwork late Monday for an preliminary general public presenting, which Bloomberg Information has described could value the business enterprise at extra than $four billion.

A single notion Nayar picked up from her time functioning with business people was the significance of a motivating business enterprise mission. With Nykaa, she observed the chance to aid India’s girls glance following by themselves, relocating away from the country’s regular deference to guys.

“I was encouraged by those die-challenging founders,” Nayar reported in a new interview over Zoom from her dwelling in Alibaug. “Our concept to girls has been that the highlight of her lifetime should be on herself. You are important in your tale and should truly feel no guilt at staying center phase.”

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The concept resonated. Started in 2012, the Mumbai-headquartered startup now gives extra than 2,five hundred makes of everything from mascara and makeup remover to velvety kohl Indian eyeliner and the overall body tattoo artwork identified as mehendi. By means of its web sites, apps and 70-furthermore brick-and-mortar shops, the enterprise hit income of 24.5 billion rupees ($330 million) in income and other profits in the fiscal calendar year ended in March, in accordance to its submitting. That figure rose by extra than 35% for the duration of that period of time, despite pandemic-mandated retail store closures and delivery difficulties. The startup is successful.

Nykaa branded beauty products and solutions within the Nykaa retail store in New Delhi, on July 30 | Bloomberg

If the IPO goes as planned, Nykaa will be India’s very first girls-led unicorn to go general public. Nayar owns about 50 % of the enterprise with her husband and their twin little ones, meaning the value of their stake could exceed $2 billion if the startup reaches or surpasses preliminary projections.

“It was a area of interest ready to be tapped and Falguni’s dived suitable in,” reported Arvind Singhal, chairman of Technopak Advisors Pvt, a primary consulting business. “India’s young populace has mounting aspirations and girls throughout social strata are extra empowered with every passing generation.”

Nayar launched the enterprise nine a long time back, figuring if she was going to commence a business enterprise it had to be ahead of she turned fifty. “The point of no return,” she reported.

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

Nayar had found that in the West whole floors of significant-conclusion department shops had been focused to cosmetics and other beauty products and solutions. But tens of millions of Indian girls even now had to stop by dingy community “bangle” or “variety” shops for their beauty demands. These mom & pop outlets, generally staffed by male homeowners, stocked cosmetics and style jewellery along with craft kits and other knick-knacks. Decisions had been limited, displays bad, and there was no probability to sample products and solutions.

Nayar’s objective was to generate a slick, built-in buying expertise the place people could store on the web or in actual physical shops, relying on what they had been looking for with that specific stop by. They could stop by a person of Nykaa’s colorfully stocked specialty shops to, say, try out on lipsticks or eyeshadows. On-line, they could get tutorials, which include from stars like Janhvi Kapoor or Debasree Banerjee.

Nykaa resisted chopping rates to lure consumers, in contrast to other e-commerce startups.

“We did not want to be a price reduction retail store,” Nayar reported. “We’d somewhat market the suitable color of lipstick at comprehensive cost, than the mistaken shade at 50 % off which would make the buyer sad inside minutes of wearing.”

From 60 day-to-day orders at launch, gross sales climbed to extra one,000 orders inside months. Nykaa constructed on its momentum by customizing products and solutions for Indian pores and skin tones, pores and skin styles and area weather conditions. It launched an array of nail hues, now up to 2,seven hundred shades. It also initiated consumers to make-up essentials, these as basis, and now gives one,five hundred shades. Nykaa’s very own vary of lipsticks have enjoyment Indian names these as Maharani (spouse of the maharaja) and Mishti (sweet individual).

“They seriously have everything,” reported Sakshi Jain, a 21-calendar year-outdated who just graduated college. “I can examine rates, study comprehensive evaluations and then invest in. All my friends store at Nykaa also.”

Bangalore college student Sayeree Nandi commenced browsing products and solutions on Nykaa at the commence of the pandemic and has given that turn out to be addicted to the application.

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“It’s extra hassle-free than going to a number of actual physical shops or searching on Amazon,” reported the 21-calendar year-outdated. She reads evaluations ahead of shopping for — pores and skin treatment products and solutions are her weak point.

The Nykaa software for on the web purchases | Bloomberg

Level of competition is mounting. Giants like Amazon.com Inc. and Walmart Inc.-controlled Flipkart On-line Providers Pvt. are increasing in the $fifteen billion beauty market, alongside with specialty stores these as LVMH’s Sephora. Area rival Purplle landed backing from Goldman Sachs Group Inc.

Nykaa’s technique has been to develop on its direct by investing in technological innovation, promoting and solution extensions. Its on the web solutions use algorithms to advise products and solutions based on what consumers have bought ahead of, considerably like Netflix Inc. suggests films.

It’s applied to dimensions to minimize distinctive tie-ups with foreign makes. World-wide makes these as Estee Lauder Cos. and MAC Cosmetics Inc. commenced to function their products and solutions in India as the market has grown. They’ve customized products and solutions also — Estee Lauder gives tiny 7- and twenty-milliliter sizes of ideal-sellers for the funds aware.

Nykaa has expanded to 3 different apps, which include, most lately, an application for men’s products and solutions.

“At social and perform gatherings, pretty senior, extremely-profitable guys had been quizzing me about pores and skin and hair treatment so I determined to launch Nykaa Male so guys could store with no fear,” reported Nayar.

Anchit, her son who graduated from Columbia University, runs the beauty e-commerce business enterprise, though daughter Adwaita, with an MBA from Harvard Business enterprise Faculty, operates the style vertical. Her husband, Sanjay Nayar, is India chairman of KKR & Co.

Ravi Mehta, the London-based handling director of Steadview Capital and an early trader in Nykaa, reported he thinks Nayar’s business has a notably solid business enterprise product amongst India’s net businesses.

“It’s a person of the speediest-escalating businesses by revenues of the extra than fifteen startups that are lined up for IPOs,” Mehta reported in a phone discussion. Steadview’s India-centered tech fund has invested in area startups, which include Zomato Ltd., Policybazaar and Lenskart Options Pvt.

Bottles of Nykaa branded nail enamel | Bloomberg

India is even now a little market in the beauty world and its reasonably small standard of residing signifies those who can indulge in Nykaa products and solutions are a tiny sliver of the country’s one.3 billion populace. But the quantity is escalating with the economic climate — and the societal modifications that are empowering extra girls. Technopak estimates the beauty market will expand extra than 8% each year right up until 2025.

India has come a very long way from the time when most girls shopped for just two beauty products and solutions — a purple lipstick and a kajal eyeliner. Nykaa is now functioning to persuade them they can indulge and upgrade to hair masks and night-face serums also.

“We even now have means to go,” reported Nayar.