Sequoia Capital-backed Indian skincare startup Mamaearth is in talks to lift not less than $300 million in a deliberate IPO subsequent yr and is searching for a valuation of round $3 billion, three folks with direct information of the corporate’s plans informed Reuters
Based in 2016, Mamaearth has develop into standard in India with its vary of “toxin-free” merchandise resembling face washes, shampoos and hair oils. It competes with Unilever’s India unit, Hindustan Unilever, and Procter & Gamble Co within the booming private care business.
The corporate was final valued at $1.2 billion in January this yr when it raised recent funds from traders together with Sequoia and Belgium’s Sofina.
Mamaearth is targetting a valuation of round $3 billion – 10-12 occasions ahead earnings primarily based on gross sales progress and future income potential, an individual briefed on the discussions mentioned. It plans to file draft regulatory papers by the top of this yr, mentioned sources, who declined to be named because the plan is non-public.
Two of these sources mentioned Mamaearth is in early-stage discussions to lift not less than $300 million in its IPO, with a 3rd supply pegging the quantity at $350 million.
A Mamaearth spokesperson declined to touch upon its IPO plans. The corporate’s goal valuation for the IPO, and the funds it plans to lift, haven’t been beforehand reported.
The corporate is in talks with JP Morgan Chase, India’s JM Monetary and Kotak Mahindra Capital to nominate them as bookrunners to the deal, the sources added
JP Morgan Chase declined to remark. JM Monetary and Kotak didn’t instantly reply to requests for remark.
Mamaearth’s IPO plans come throughout a broader rout in capital markets and a slowdown in India’s booming startup ecosystem that recorded a steller $35 billion in file fundraising final yr. Now, some startups are reducing again on workers and discovering it troublesome to lift funds, Reuters has reported.
Mamaearth was co-founded by Varun Alagh, a former Hindustan Unilever government, and his spouse Ghazal. With the model endorsed by standard Bollywood celebrities, the duo has cashed in on rising e-commerce adoption in India by providing its merchandise on platforms resembling Amazon and Walmart’s Flipkart.
India’s magnificence and private care business is anticipated to develop to $27.5 billion by 2025, from $17.8 billion in 2020, Indian monetary companies agency Avendus estimates. The variety of web shoppers for magnificence merchandise can be projected to rise to 135 million from 25 million throughout that interval, it added.
One fairness analysis analyst, nonetheless, mentioned the success of Mamaearth’s IPO may hinge on the way it plans to quickly increase into offline gross sales. Most Indians nonetheless go to shops to buy, with e-commerce accounting for simply 5-6% of spending.
CEO Alagh informed the Enterprise Customary newspaper in January that 70 per cent of Mamaearth’s gross sales come from on-line platforms, nevertheless it was targetting an even bigger offline presence and aiming to succeed in 40,000 shops in 100 cities this yr.
For the fiscal yr led to March 2022, Mamaearth’s dad or mum, Honasa Client Pvt Ltd, registered a income of $130 million, with a small revenue, mentioned one of many three sources.
The corporate recorded a post-tax revenue of Rs 246 million ($3.15 million) for the yr ended March 2021.
(Aside from the headline, this story has not been edited by IHNS workers and is printed from a syndicated feed.)