You need a lot of naivety to be an entrepreneur: Manish Taneja of Purplle

Last week, Purplle became India’s 102nd unicorn after raising $33 million as part of its Series E funding round, led by South Korea's Paramark Ventures. Purplle runs a beauty and personal care e-commerce platform.

 Starting from Army canteens to now rolling out its own stores, co-founder Manish Taneja aims to build Purplle like an FMCG company. He believes Purplle remains an underdog.

Taneja, an IIT Delhi alumnus, co-founded Purplle with Rahul Dash and Suyash Katyayani, IIT Kharagpur and IIM Ahmedabad alumnus in 2012. The company counts Goldman Sachs, JSW Ventures, Blume Ventures, Kedaara Capital, and billionaire Azim Premji's Premji Invest as it backers.

 Too much experience not always good

 “When we entered the feminine hygiene category with our acquisition of Carmesi, many advised us not to. You need a lot of naivety to be an entrepreneur… if you have too much experience, you will find it risky and will not touch. But here we are. We will continue to challenge the status quo and am inherently the underdog, which is why we push ourselves harder and don't let entitlement settle in,” he says.

Rewinding back to 2012, when the company was founded, Taneja says: “Around that time, very few believed in vertical e-commerce. So, in the first three years, I used to meet large FMCG companies and convince them to sell online. Those days, there used to be a general trade channel, like a small kirana store and a modern trade channel, which would be Lifestyle, Shoppers’ Stop and so on.”

“But there was always a third channel, which was the most neglected channel -- the institutional sales channel. So all these brands would supply products to Army canteens. So, we used to tell the channel manager, ‘why don't you go there and get some products for them because they never had the latest launches, or the full assortments’?''

 Launch of private labels

 “Once the supply was ready, demand was always there,” he adds. The next few years was about scaling the business. But, starting 2015, the brand started focusing on customer profiles, which was later used to launch its private labels. Today, apart from 1,000 brands, Purplle has five private labels which contributes around 30 percent to its revenue in addition to its offline business.

“When we raised our first round, we were actually a data-led firm. We were growing 100 percent year-on-year and turned profitable as our private labels had high margins.” Taneja adds that Purplle’s price point also is an added advantage and luck on their side.

“When COVID broke out in 2020, we were sitting on Rs 250 crore of capital in the bank and we were burning Rs 2 crore a month and our revenue was zero in the first month of COVID,” Taneja told Moneycontrol.

Still, the team decided to not go for layoffs or salary cuts, but to grow on the basis of the profitability metric. Fast forward to today, the brand clocks around Rs 80-85 crore a month in revenue, and $180 million gross merchandise value in 2022 with 7 million monthly active users.

 The newly minted unicorn now plans to focus on acquisitions and drive its offline expansion. “We opened Purplle store in Delhi and plans to roll out more stores with the right experience, very fast.”

Notably, a number of its rival companies like Nykaa and Sugar Cosmetics are also focusing on offline channels as new customer acquisitions are becoming more expensive.

Besides, competition in the beauty and personal care segment is increasingly intensifying with companies raising millions. Tracxn data shows that the sector raised $777 million last year with MyGlamm and Mamaearth turning unicorns, while this year, companies in the segment have raised $230 million so far, despite the slowdown in overall funding to India's startups.

On building its house of brands strategy, Taneja says that corporate governance is their highest priority while acquiring a brand.

Purplle will not look to foray into other categories but plans to replicate the model of a FMCG company. “India's largest FMCG company has built a Rs 20-25,000 crore business and that's how you create a lot of value. And if we could replicate it over the next 5-10 years, I think it would be a great achievement. It's the harder one to do, but at the same time, more rewarding.”

Apart from these, the company will continue to invest on its data capabilities and marketing.

Commenting on the overall market, Taneja said, “You don’t build business for the next one or two quarters but with a view of 10 years or more.  And, whenever there is a slowdown in funding or in the market, there's a lot of good talent available to join you. It's very difficult to hire great talent and we've seen all that playing out in the last two years. I think this is a great time to invest and to build teams."