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    Steadview funding values Nykaa at $1.2 billion

    Synopsis

    The funding includes the sale of shares by some existing investors and employees of Nykaa, which has been done at a discount to the $1.2-billion valuation.

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    The company’s net revenue more than doubled to Rs 1,159 crore at the end of March 2019 as against Rs 555 crore in the year ago period.
    (This story originally appeared in on Apr 01, 2020)
    BENGALURU: Nykaa has raised a total of Rs 100 crore, or $13 million, from hedge fund Steadview Capital at a valuation of Rs 9,200 crore, or over $1.2 billion, according to MCA filings from business intelligence platform Tofler. With this, the online beauty and cosmetics seller has become the latest unicorn (valued at over $1 billion) in the Indian startup industry.

    The new round of funding comes as online retail business is set to enter a tough quarter, with sales restricted to just essentials and the overall slowdown likely to impact discretionary spending like cosmetics. Nykaa sells beauty products via its online store as well as 50-60 offline stores across the country.

    The funding includes the sale of shares by some existing investors and employees of Nykaa, which has been done at a discount to the $1.2-billion valuation. The latest round comes about a year after the company raised $15 million from TPG Growth, which had valued it at $724 million.

    At the same time, Nykaa said that it is taking precautions as it told its vendors in a communication that its cash flows and income will be impacted. “The lockdown has already impacted business across industry, and this will have significant impact on the business cycle, including cash-conversion cycle...In light of this, we find it prudent to update you that there will be a delay in making payments of outstanding invoices to all vendors and partners,” Nykaa communicated on Tuesday.

    Nykaa confirmed the Steadview investment. “We are very grateful to achieve this significant milestone...In the midst of this unprecedented global crisis, we are working to ensure all our stakeholders are well served and that Nykaa emerges as a leading retail player in the industry,” Nykaa founder & CEO Falguni Nayar said in a statement on Tuesday.

    The company’s net revenue more than doubled to Rs 1,159 crore at the end of March 2019 as against Rs 555 crore in the year ago period. But what sets Nykaa apart is that it is one of the few unicorns that makes money, as it reported a profit of Rs 2.3 crore during the period against a loss of Rs 17.7 crore earlier.

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