Reuters
June 21, 2022 / 03: 18 PM IST
Sequoia Capital-backed Indian skincare startup Mamaearth is in talks to raise no lower than $300 million in a deliberate IPO next year and is searching for a valuation of around $3 billion, three of us with pronounce data of the corporate's plans told Reuters
Basically based in 2016, Mamaearth has change into long-established in India with its vary of "toxin-free" products equivalent to face washes, shampoos and hair oils. It competes with Unilever's India unit, Hindustan Unilever, and Procter & Gamble Co in the booming non-public care enterprise.
The company used to be final valued at $1.2 billion in January this year when it raised fresh funds from investors in conjunction with Sequoia and Belgium's Sofina.
Mamaearth is targetting a valuation of around $3 billion – 10-12 events forward earnings in step with sales boost and future revenue skill, a person briefed on the discussions talked about. It plans to file draft regulatory papers by the halt of this year, talked about sources, who declined to be named because the notion is non-public.
Two of these sources talked about Mamaearth is in early-stage discussions to raise no lower than $300 million in its IPO, with a third provide pegging the number at $350 million.
A Mamaearth spokesperson declined to comment on its IPO plans. The company's intention valuation for the IPO, and the funds it plans to raise, maintain no longer been beforehand reported.
The company is in talks with JP Morgan Trudge, India's JM Monetary and Kotak Mahindra Capital to appoint them as bookrunners to the deal, the sources added
JP Morgan Trudge declined to comment. JM Monetary and Kotak did no longer without extend answer to requests for comment.
Mamaearth's IPO plans come at some level of a broader rout in capital markets and a slowdown in India's booming startup ecosystem that recorded a steller $35 billion in document fundraising final year. Now, some startups are slicing lend a hand on workers and finding it sharp to raise funds, Reuters has reported.
Mamaearth used to be co-founded by Varun Alagh, a used Hindustan Unilever executive, and his accomplice Ghazal. With the logo counseled by long-established Bollywood celebrities, the duo has cashed in on rising e-commerce adoption in India by offering its products on platforms equivalent to Amazon and Walmart's Flipkart.
India's beauty and non-public care enterprise is expected to develop to $27.5 billion by 2025, from $17.8 billion in 2020, Indian monetary companies and products firm Avendus estimates. The sequence of online customers for beauty products is moreover projected to upward thrust to 135 million from 25 million at some level of that length, it added.
One fairness analysis analyst, on the opposite hand, talked about the success of Mamaearth's IPO might per chance also hinge on how it plans to with out warning extend into offline sales. Most Indians mute saunter to retail outlets to store, with e-commerce accounting for merely 5-6% of spending.
CEO Alagh told the Alternate Identical old newspaper in January that 70% of Mamaearth's sales come from online platforms, nonetheless it absolutely used to be targetting a bigger offline presence and aiming to attain 40,000 retail outlets in 100 cities this year.
For the fiscal year resulted in March 2022, Mamaearth's parent, Honasa Client Pvt Ltd, registered a revenue of $130 million, with a runt revenue, talked about one in every of the three sources.
The company recorded a put up-tax revenue of 246 million Indian rupees ($3.15 million) for the year ended March 2021.
