Sequoia Capital-backed Indian skincare startup Mamaearth is in talks to lift no less than $300 million in a deliberate IPO subsequent 12 months and is searching for a valuation of round $3 billion, three individuals with direct information of the corporate’s plans informed Reuters.
Founded in 2016, Mamaearth has develop into well-liked in India with its vary of “toxin-free” merchandise comparable to face washes, shampoos, and hair oils.
It competes with Unilever’s India unit, Hindustan Unilever, and Procter & Gamble Co within the booming private care business.
The firm was final valued at $1.2 billion in January this 12 months when it raised contemporary funds from buyers together with Sequoia and Belgium’s Sofina.
Mamaearth is targetting a valuation of round $3 billion – 10-12 instances ahead income, an individual briefed on the discussions stated. It plans to file draft regulatory papers by the top of this 12 months, stated sources, who declined to be named because the plan is personal.
Two of these sources stated Mamaearth is in early-stage discussions to lift no 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 book-runners for 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 stellar $35 billion in document fundraising final 12 months.
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 govt, and his spouse Ghazal.
With the model endorsed by well-liked Bollywood celebrities, the duo has cashed in on rising e-commerce adoption in India by providing its merchandise on platforms comparable to Amazon and Walmart’s Flipkart.
India’s magnificence and private care business is anticipated 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, nevertheless, stated 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, but it surely was targetting a much bigger offline presence and aiming to achieve 40,000 stores in 100 cities this 12 months.
For the fiscal 12 months led to March 2022, Mamaearth’s father or mother, Honasa Consumer Pvt Ltd, registered a income of $130 million, with a small revenue, stated one of many three sources.
The firm recorded a post-tax revenue of 246 million Indian rupees ($3.15 million) for the 12 months ended March 2021.
($1 = 78.0750 Indian rupees)
