Skincare start-up Mamaearth eyes $3 bn valuation in 2023 IPO: Report

Sequoia Capital-backed Indian skincare startup Mamaearth is in talks to lift not less than $300 million in a deliberate IPO subsequent yr and is searching for a valuation of round $3 billion, three folks with direct data of the corporate’s plans informed Reuters.

Founded in 2016, Mamaearth has change into widespread in India with its vary of “toxin-free” merchandise corresponding to face washes, shampoos and hair oils. It competes with Unilever’s India unit, Hindustan Unilever, and Procter & Gamble Co in the booming private care business.

The firm was final valued at $1.2 billion in January this yr when it raised recent funds from traders together with Sequoia and Belgium’s Sofina. Mamaearth is targetting a valuation of round $3 billion – 10-12 instances ahead earnings primarily based on gross sales progress and future income potential, an individual briefed on the discussions mentioned. It plans to file draft regulatory papers by the top of this yr, mentioned sources, who declined to be named because the plan is personal.

Two of these sources mentioned Mamaearth is in early-stage discussions to lift not less than $300 million in its IPO, with a 3rd supply pegging the quantity at $350 million.’A Mamaearth spokesperson declined to touch upon its IPO plans. The firm’s goal valuation for the IPO, and the funds it plans to lift, haven’t been beforehand reported.’

The firm is in talks with JP Morgan Chase, India’s JM Financial and Kotak Mahindra Capital to nominate them as bookrunners to the deal, the sources added JP Morgan Chase declined to remark. JM Financial and Kotak didn’t instantly reply to requests for remark.

Mamaearth’s IPO plans come throughout a broader rout in capital markets and a slowdown in India’s booming startup ecosystem that recorded a steller $35 billion in file fundraising final yr. Now, some startups are reducing again on workers and discovering it troublesome to lift funds, Reuters has reported.’

Mamaearth was co-founded by Varun Alagh, a former Hindustan Unilever government, and his spouse Ghazal. With the model endorsed by widespread Bollywood celebrities, the duo has cashed in on rising e-commerce adoption in India by providing its merchandise on platforms corresponding to Amazon and Walmart’s Flipkart.

India’s magnificence and private care business is predicted to develop to $27.5 billion by 2025, from $17.8 billion in 2020, Indian monetary providers agency Avendus estimates. The variety of internet buyers for magnificence merchandise can be projected to rise to 135 million from 25 million throughout that interval, it added.

One fairness analysis analyst, nonetheless, mentioned the success of Mamaearth’s IPO may hinge on the way it plans to quickly broaden into offline gross sales. Most Indians nonetheless go to stores to buy, with e-commerce accounting for simply 5-6% of spending.

CEO Alagh informed the Business Standard newspaper in January that 70% of Mamaearth’s gross sales come from on-line platforms, nevertheless it was targetting an even bigger offline presence and aiming to achieve 40,000 stores in 100 cities this yr. For the fiscal yr ended in March 2022, Mamaearth’s mum or dad, Honasa Consumer Pvt Ltd, registered a income of $130 million, with a small revenue, mentioned one of many three sources.

The firm recorded a post-tax revenue of 246 million Indian rupees ($3.15 million) for the yr ended March 2021.

(This story has not been edited by Business Standard workers and is auto-generated from a syndicated feed.)

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