Beauty and fashion retailer Nykaa on Friday announced investments in three brands in the clean beauty, wellness, and athleisure space for a total of Rs 49.76 crore.

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The company has picked up an 18.51 percent stake in clean beauty brand Earth Rhythm for Rs 41.65 crore, 60 percent in Nudge Wellness for Rs 3.6 crore, and acquired athleisure brand 'KICA' for Rs 4.51 crore.

Nykaa's investment in newly incorporated Nudge Wellness marks its foray into the nutraceuticals and dietary supplements space. Nudge is run by D2C brand incubator Onesto Labs, which also runs brands like Chemist at Play, Bare Anatomy, and SunScoop SPF.

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Nudge will now become a subsidiary of Nykaa, creating a new category and launching nutraceuticals & edible beauty products under the brand ‘Nudge’. Nykaa, which already sells some nutraceuticals on its platform sees significant growth opportunities in this space.

Anchit Nayar, CEO of e-commerce beauty at Nykaa said nutraceuticals, albeit a newer category, have been among the fastest-growing categories on its platform. With the market currently $2.5 billion in size, growing at 17-18 percent CAGR, Anchit says there is an opportunity for young brands to grow in this space given there are not many large incumbents here.

"There has been a visible and conscious shift in consumer mindsets, with wellness taking centre stage, especially post-pandemic, towards health solutions that offer long-term payoffs. Our partnership with Nykaa comes at an opportune juncture of growing interest and consumption in nutraceuticals," Rohit Chawla, founder of Onesto Labs said.

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Nykaa’s investment in Earth Rhythm will strengthen the company’s product portfolio in the sustainable beauty segment. The company clocked a revenue of Rs 18.56 crore in FY22, up from Rs 5.63 lakh in FY21.

Harini Sivakumar, founder, and CEO of Earth Rhythm, said, "We are thrilled to have Nykaa as an investor in Earth Rhythm. Their investment is a clear endorsement of our efforts to build clinically effective and technology-driven skincare and haircare brand. Through this investment, our commitment to our customers and the planet is only going to get stronger."

Nykaa has also been aggressively growing its fashion business, which saw an annualized run rate of Rs 2,000 crore in the fiscal gone by and now contributes to 25 percent of the company’s consolidated revenue.

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Activewear brand KICA, founded by Aneesha Labroo in 2017 joins Nykaa Fashion’s stable of owned brands, which currently include Nykd, Pipa Bella, Twenty Dresses, RSVP, Gajra Gang, IYKYK, and Likha.

Nykaa has acquired the complete intellectual property rights of KICA, which will now add to Nykd’s portfolio of active wear. "We are thrilled to be part of the Nykaa Fashion family and will continue to develop community initiatives that empower & motivate women to lead healthy, active lives," Aneesha Labroo, founder of Kica said.

The larger strategy here for Nykaa here is to invest in growing direct-to-consumer brands and help them scale. "The entrepreneurial spirit in India has never been this strong and Nykaa wants to play a role in this movement by partnering with promising brands.

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We would like to help these brands remove roadblocks to growth. Nykaa’s ecosystem includes a wide online and offline retail distribution & B2B distribution, and we want to equip partner brands with all tools they need to help product creation and solve consumer problems," said Falguni Nayar, founder, and CEO of Nykaa.

Going forward too, Falguni said the company will continue to look for brands – big and small -- with unique brand propositions and offerings that Nykaa doesn’t currently have.

First Published:Apr 22, 2022 8:08 PM IST