Online baby care brand Mamaearth has raised ₹130 crore (about $18.14 million) in a round led by Sequoia Capital India, the company said on Wednesday. Existing investors Fireside Ventures, Stellaris Venture Partners and Sharp Ventures also participated in the round.
On 9 July 2019, Mint first reported that Sequoia was in talks to lead a $20-million Series B round. The round also saw some angel investors exiting the company with over 20x returns on their investments.
Founded in 2016 by husband-wife duo Varun and Ghazal Alagh, Mamaearth, run by Honasa Consumer Pvt. Ltd, offers over 80 natural, toxin-free products, including bamboo-based baby wipes, lotions and face masks. It claims to have over 1.5 million consumers in 500 Indian towns and cities.
“We have a long way to go at Honasa. Our vision is to create the FMCG conglomerate of the future by building brands that connect strongly with millennials and Gen Z customers using the combined power of digital marketing and e-commerce at large scale,” said Varun Alagh, founder and CEO, in a statement.
Mamaearth also claims to be one of the fastest Indian startups to notch up an annual revenue run rate of ₹100 crore.
The company will use the money to acquire 5 million new customers and launch more internet-first and millennial consumer brands, to build a ₹500-crore brand by 2023. It also plans to expand to parts of Southeast Asia, potentially a strong market because of a similar millenial audience, the statement said.
“Out of India’s $15B+ personal care market, online channels contribute to only 3-5%. With 15-20% of Indian shoppers influenced digitally and expected to double in next 7-8 years, digital first brands have the potential to redefine the architecture of tomorrow’s FMCG companies,” said Ishan Mittal, principal, Sequoia Capital.
Consumer startups in food and beverages, apparel, and electronics, driven by a large user-base and maturing market, are seeing rising interest from venture capital funds.
Investments in consumer brands for the quarter to June 2019 stood at $66 million, the highest in four quarters with the highest number of deals—15—in six quarters, according to data from Venture Intelligence.