Mumbai-based online beauty retailer Nykaa recently announced that it has raised ₹100Cr from existing investor Steadview Capital.
Nykaa had earlier raised ₹100Cr from Singapore-based investment firm TPG Growth at a valuation of $724mn in March 2019.
It was also being speculated for quite some time now that Nykaa has been planning for larger funding round from SoftBank at over $1.2 billion valuation and eyeing an initial public offering (IPO) in the next few years.
Talking about the recent investment, Ravi Mehta, Founder, and CIO of Steadview Capital, said, “We are excited to deepen our partnership with Nykaa. Nykaa has transformed the beauty industry in India and has established a very strong brand. We believe the company is poised for a strong growth trajectory in the years to come. The company’s focus on customer service and capital efficiency stands out in the Indian eCommerce space.”
In a statement on the latest fund infusion, Falguni Nayyar, Founder, and CEO of Nykaa said, “We are very grateful to achieve this significant milestone. We deeply value the trust and support of our investors, customers and brand partners who have been instrumental to our success. In the midst of this unprecedented global crisis we are working to ensure all our stakeholders are well served and that Nykaa emerges as a leading retail player in the industry.”
The recent development, comes along with the company decision to suspend operations, due to the 21-day government-imposed lockdown to prevent community transmission in the country.
In an email to its vendors, Nykaa said, “The spread of COVID-19 across the globe has caught everyone unprepared…Most of the state governments have issued directives to temporary shut down establishments, retail stores, logistics, business operations, etc. We are adhering to every instruction of the government and the health department and will continue to do so. Thus, we have suspended our operations and temporarily shut down all our retail stores, our corporate offices, warehouses pan India.”
“The lockdown has already impacted business across the industry, and this will have a significant impact on the business cycle including the cash conversion cycle. Like all consumer-facing businesses, we now face a situation where our cash flow and income are impacted, but on the other hand, our expenses remain constant. In light of this, we find it prudent to update you that there will be a delay in making payments of outstanding invoices to all vendors and partners,” it added.
The company has also posted a note on its website informing users that it will only focus on daily essentials for now.
“Please note we are only accepting prepaid orders for now on daily essentials. We have started deliveries to select pin codes in Mumbai, Pune, New Delhi, and Bangalore. However, there might be some delays due to local constraints. We are doing our best to restart deliveries to other cities,” the note said.
The novel coronavirus pandemic has a major impact on vertical e-commerce businesses like Nykaa. In the last few weeks, these players have been struggling to do business as the government doesn’t consider them in essential services.
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