Home Beauty & Wellness SUGAR Cosmetics delivers 49X returns to long-term investor India Quotient

SUGAR Cosmetics delivers 49X returns to long-term investor India Quotient

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Cosmetics, a cult-favourite amongst Gen Z and millennials, is one of the fastest-growing premium beauty brands in India. Launched in 2015, the brand has quickly made its way into most makeup aficionado’s vanity. The year 2021 was off to a strong start for the digital-first beauty player as they announced a US $21 Million (INR 153 Cr) Series C funding round in early February. As part of this Series C, – the company’s earliest backer marginally trimmed their holding to clock a 49X return on their investment at an IRR of ~61%.

SUGAR Cosmetics delivers 49X returns to long-term investor India Quotient

Till date, the company has raised a total of US $33 Million funds. India Quotient has consistently backed the founding team of Vineeta Singh and Kaushik Mukherjee through all 4 rounds of funding till date including the recently concluded Series C where it co-invested with Elevation Capital and A91 Partners. As a result of this continued participation across rounds, India Quotient is currently the second largest institutional investor of the company with a stake worth more than its first two funds put together.

Referring to the brand’s funding strategy, , founding partner, India Quotient said; “Ever since the launch of our operations in 2012, we have invested in over 70 start-ups. While we first backed the founders in 2013, we did infuse some amount in SUGAR Cosmetics in 2016 from the first fund’s ‘reserve for AMC fees’ amount – we just knew that this association was to go a long way. The projections of the online beauty industry and the all-in approach of the team just had to be seen through to the Series A fundraise in June 2017. Seeing the brand grow to become a cult-favourite among millennial women was a proud moment for us as well because we knew that the gut feel was validated. Watching how quickly SUGAR was carving their mark in the beauty industry, we returned to invest in the brand in their Series B & Series C rounds as well.”

India Quotient first invested in 2013 when the parent company Pvt. Ltd. was pursuing a beauty subscription service business model. In 2015, SUGAR Cosmetics was launched under the same company with a limited range of Crayon Lipsticks, Vivid Lipsticks, Matte Eyeliner and Kajal that disrupted the online cosmetics market. With matte, long-lasting makeup with shades that were specifically suited for Indian skin tones, the brand grew virally through rave reviews on Instagram and YouTube. Starting with net revenue of INR 3 CR in 2016-2017 the brand successfully clocked in INR 105+ CR in its 4th fiscal year, reaching an 85% YOY growth rate – while notching up 1.5+ million followers across social media platforms by the side.

Apart from investments in keeping the brand’s fast-moving product range ahead of the curve, SUGAR plans on using their latest funds in building both digital and retail distribution to further their reach in existing and new geographies. The brand’s Android and iOS apps have seen a million downloads with a 4.6-star rating, indicating a strong community of beauty enthusiasts that the brand speaks to. The retail footprint is also expected to grow from the current 10,000+ retail outlets to 40,000+ in the current year.