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Sequoia may invest more in Mamaearth as it seeks to enter Unicorn Club

Mamaearth is a skincare and baby care products business which is planning to seek funds that increase its valuation by three times in just a span of one year. This information has been confirmed from two trustable sources familiar with the matter.

Mamaearth is planning to raise funds worth Rs. 2,000 Cr. from Sequoia Capital which is already an investor for the baby-care products company. Sequoia Capital is in advanced talks with Mamaearth owners to invest an additional amount of Rs. 200 Cr. i.e. $30 million.

Sequoia Capital has previously invested Rs. 130 Cr. in  Mamaearth in January this year which evaluated the company’s value at Rs. 700 Crore.

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Mamaearth is a baby-care and skincare start-up launched in 2016 by Varun Alagh and Ghazal Alagh. The company offers toxin-free products, bamboo-based baby wipes, over 80 natural product items such as face-masks and lotions.

The company is run by Honasa Consumer and has an online digital presence. The COVID-19 pandemic has boosted the sales of online-based stores and brands, one of which is Mamaearth. The company has seen rapid sales during these months of lockdown in India.

The current revenue of Mamaearth is somewhere near Rs. 30 Cr. per month which when used the mathematics of profit results in up to six times the company’s annual revenue. The numbers are impressive but analysts believe that the growth prospects in this sector of business are huge and six times multiples are common for such businesses.

Intending to seek more funds, Mamaearth wanted to go out for formal funding rounds but as one of our sources tipped, Sequoia Capitals is already in advanced talks with the company to fund an additional Rs. 20-30 Crore. It is believed that Sequoia Capitals did not give Mamaearth much of a choice to make this decision.

Other than Sequoia Capitals, Mamaearth has some well-known investors such as actor and entrepreneur Shilpa Shetty Kundra, Rohit Bansal and Kunal Behl—founders: Snapdeal, FireSide Ventures, Rishabh Mariwala from Marico and Stellaris Venture.

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Although Mamaearth started with selling only baby-care products but now the company has diversified its selling options with Make-up remover, anti-acne kits, skin serums etc. The company makes best sales from Amazon and its online retail store but they also have offline stores in Delhi, Chennai, Pune, Mumbai, Kolkata and Nagpur.

Investors believe that digital standing in today’s time is extremely necessary and digital-first brands have a very bright future. These companies have the ability to enter Rs. 100 Crore club more than offline retailers.



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