Manish Taneja is the CEO and co-founder of Purplle
Beauty products platform Purplle is in talks to raise $50-75 million, valuing the company at over $500 million, people familiar with the matter said, underlining the funding frenzy under way for consumer brands, especially in the beauty and wellness segment.
Investors including Norwest Venture Partners, Kedaara Capital, Venturi Partners and South Korea’s Mirae are jostling to invest in Purplle, while Sequoia India will double down on its stake, the people said requesting anonymity. Purplle is still deciding the allocations for investors, they added.
Norwest Venture, Kedaara, Venturi, Mirae, Sequoia and Purplle did not comment on the fundraising plan.
Purplle, pitched earlier to investors and executives as a ‘Nykaa for tier 2-3 cities and beyond,’ was valued at about $300 million in March, when it raised $45 million from Sequoia, Verlinvest and others.
Cosmetics retailer Nykaa is gearing up for a record-breaking public share sale that could value the company at as much as $8 billion – over 20 times its annual revenue, people aware of the IPO plans said.
Purplle, in comparison, has a revenue run rate of about $80 million, or about Rs 50 crore, a month. That would put its valuation at 5-6 times its annual revenue.
Founded by Manish Taneja and Rahul Dash in 2012, Purplle offers makeup, skincare, hair care and other beauty and personal care products by aggregating brands such as L’Oreal, Colorbar and Mamaearth on its platform.
Purplle also has its own brands including NYBae and Good Vibes. Unlike Nykaa, it plans to launch multiple independent brands that will have their own marketing and positioning.
While Purplle started as a typical beauty e-commerce marketplace, CEO Taneja told Moneycontrol last year that the business will be run as two units – “where Purplle will be treated at an arm’s length distance, just like any other marketplace will be treated. So, one business is a platform marketplace business and the other business is a fundamental brand creation business.”
After incubating and launching brands over the past few years, Purplle is suddenly among a litany of companies wanting to build a ‘house of brands’ for new-age consumers. Mensa Brands, Upscalio, GlobalBees, Mamaearth and Mosaic Wellness are among those targeting this space, although some are more focused on healthcare than beauty and others are eyeing home-related categories and apparel too.
“Any private investor who missed Nykaa – and there are many – sees Purplle as the next-generation bet in this beauty and cosmetics space. Some of the newer brands are still untested but the core platform looks solid,” said a person involved in the negotiations.
While Nykaa turned in a net profit of Rs 61.9 crore in FY21 – one of the rare consumer startups to do so – Purplle’s earnings before interest, taxes, depreciation and amortisation were -2 percent, Taneja said. EBITDA indicates a company’s operating profit efficiency.
Purplle has been an online-only brand so far, unlike Nykaa, Mamaearth, SUGAR Cosmetics and others that have gone offline as well. Even as the COVID-19 pandemic waned and people continued to shop online, footfalls at malls increased significantly and in some cases, the offline shares of retailers returned to pre-pandemic levels.
Mamaearth raised $50 million led by Sofina in July, valuing it at $730 million. MyGlamm also raised funds from venture firm Accel.