Tycoons of Tomorrow 2022: Mamaearth, Infra.Market founders underscore need for profitable unicorns

Winners Varun and Ghazal Alagh of Mamaearth, the beauty and skincare products brand, during the Forbes event spoke about strong fundamentals of business which are necessary for sustainability. Image: Forbes

India which has a 100-plus strong unicorn club with most of the $1 billion valuations coming in 2021 has seen only a handful of profitable unicorns.

Founders of Mamaearth Varun and Ghazal Alagh, and Aditya Sharda and Souvik Sengupta of Infra.Market talked about the need for profitable unicorns in India.

"Strong fundamentals of business are necessary for sustainability,” said Varun Alagh. "Not every business makes profit in year one or five. Every business has its journey. As long as the fundamentals are right, the vision is there, then frugality is there in the DNA. Look at Amazon which till five years back was not profitable and that was 20 years into its journey. Looking down on losses in the short term might not help you create world-changing companies in the long term," he said during Forbes India event called Tycoons of Tomorrow 2022.

Souvik Sengupta said that for founders, sensibility to profitability is critical. "If you can foresee when you become profitable that is important. As a B2B company, it is very critical to understand what you are building essentially because you are attacking a problem where there are large incumbents that you have to take on and disrupt a market which has more scale than B2C companies. When you have such large pools of capital required then you can't only depend on venture capitalist investors. To tap different pools of capital you need to have a business model that convinces different pools of capital to invest," he said.

On profitability, Ghazal Alagh said that from the beginning the only way they understood to make a business was to eventually have a clear vision that it will start making money and that the year-on-year focus on P&L (profit and loss) was strong.

The two companies are focusing on their growth strategy with Mamaearth looking at its offline journey by starting its own exclusive brand outlets whereas Infra.Market is focusing on cross-border opportunities.

"We are at the cusp of cross-border opportunity, we have PLI schemes across sectors. There's going to be China-plus-one strategy. We have the opportunity as contract manufacturers in India to service global clients. Today a large part of our revenue flow is from exports," said Sengupta.

But the founders of the two firms said that listing is not on the cards this year for the two unicorns.