ADIA picks up Purplle's shares from JSW Ventures in secondary transaction

Founded by IIT Delhi alumnus Taneja, and IIT Kharagpur and IIM Ahmedabad alumnus Rahul Dash in 2012, Purplle runs a beauty and personal care e-commerce platform.

Beauty products platform Purplle has raised around $40-$50 million in a flat round which was split as a primary and a secondary one, people aware of the developments told Moneycontrol.

The capital infusion comes at a time when the e-commerce industry has slowed down, after steep growth during the Covid years, which has forced an increasing number of online-only startups, especially the direct-to-consumer (D2C) companies, to look at an omnichannel play and other strategies to sustain growth.

While South Korea's Paramark Ventures infused a part of the $33 million committed to Purplle last year in a primary round, JSW Venture has partially exited in the company and sold stake to Abu Dhabi Investment Authority (ADIA).

The secondary market transaction between ADIA and JSW Ventures, gave the latter a return of 18X on its investments, made over the years, the company said in a release on May 24.

"Following this transaction, JSW Ventures has returned 2x of the Fund I corpus to their investors," it added.

A small part of Paramark Ventures $33 million commitment to Purplle came now, in what was understood to be an extension of the previous round that materialized in June last year, which sent Purplle into the coveted list of unicorns. 

"The round closed at least a couple of months ago. While Paramark has put in some cash as part of its commitment last year, ADIA has picked up Purplle's shares from JSW Ventures through a secondary round," one of the people cited above said.

"Since it is an extension of the previous fundraise, it is done at a flat valuation of $1.1 billion," they added.

Flat rounds and down rounds are gaining prominence in an environment where capital has become difficult to access for several startups. Investors have also backed flat rounds or down rounds because sky-high valuations do not hold true anymore.

Including the latest round, Purplle has raised around $450 million from Premji Invest, Blume Ventures, homegrown private equity firm Kedaara Capital, Goldman Sachs, JSW Ventures and several others.

The company will use this capital to expand its offline footprint by opening more stores and also strengthen its online presence, as an increasing number of direct-to-consumer (D2C) companies look at an omnichannel strategy to drive growth.

Mint was the first to report about Purplle raising around $50-60 million from ADIA in a deal that was largely a secondary transaction with a small primary component, too.

Founded by IIT Delhi alumnus Taneja, and IIT Kharagpur and IIM Ahmedabad alumnus Rahul Dash in 2012, Purplle runs a beauty and personal care e-commerce platform and competes with Ranveer Singh-backed SUGAR Cosmetics, BSE-listed Nykaa and several others.