Sugar Cosmetics has raised Rs 144.5 crore from existing investor A91 Partners, giving the direct-to-consumer beauty brand a fresh capital infusion at a dramatically lower valuation than the one it commanded during its 2022 fundraising.
The latest transaction values Sugar at an implied post-money valuation of around Rs 755 crore, representing a markdown of nearly 75% from its peak valuation of approximately Rs 3,000 crore.
The funding comes at a challenging time for the cosmetics company, which has reported declining revenue and a sharp increase in losses.
Credits: Moneycontrol
A91 Partners Doubles Down on Sugar
Sugar’s board has approved the allotment of 1,12,248 Series D7 compulsorily convertible preference shares to A91 Partners at an issue price of Rs 12,871 per share.
A91 Partners subscribed to the entire issue and is expected to hold approximately 19.97% of Sugar following the transaction.
While the fresh funding provides Sugar with additional capital to operate and potentially strengthen its business, the valuation attached to the round highlights how dramatically investor expectations have changed since the company’s high-growth phase.
The implied valuation of Rs 755 crore is roughly one-quarter of the Rs 3,000 crore valuation Sugar secured during its previous major fundraising round in 2022.
Revenue Falls as Losses Nearly Double
Sugar’s latest funding arrives after a difficult financial year.
The company’s operating revenue declined around 20% to Rs 404 crore in FY25, compared with Rs 505 crore in FY24.
At the same time, its financial losses widened significantly. Sugar’s net loss nearly doubled to Rs 135 crore in FY25, up from Rs 68 crore the previous year.
The combination of falling revenue and increasing losses has put pressure on the company’s growth story, particularly in an increasingly competitive Indian beauty and personal-care market.
The latest funding therefore provides Sugar with important financial breathing room as it attempts to stabilize its business and return to a stronger growth trajectory.
From D2C Startup to Offline Beauty Brand
Founded by Vineeta Singh and Kaushik Mukherjee, Sugar Cosmetics began as an online-first beauty company before expanding aggressively into physical retail.
The brand sells makeup and personal-care products through its own website, online marketplaces and a growing network of offline stores.
Sugar became one of the prominent names during India’s D2C boom, particularly among younger consumers. Its positioning around affordable, trend-focused cosmetics helped it build a strong identity in a market increasingly influenced by social media and digital shopping.
However, expanding offline comes with higher operating costs, while competition from established beauty companies and newer digital-first brands has intensified.
From Rs 3,000 Crore to Rs 755 Crore
Sugar’s valuation trajectory illustrates the sharp reset that has taken place across India’s consumer startup ecosystem.
In 2022, Sugar raised $50 million in a Series D round led by L Catterton, a consumer-focused private equity investor. The round valued the company at approximately $400 million, or around Rs 3,000 crore at the time.
The company was then pursuing rapid expansion, particularly in offline retail, while positioning itself as a leading beauty brand for younger Indian consumers.
Three years later, the latest transaction establishes a substantially lower valuation benchmark.
A nearly 75% markdown does not necessarily mean the brand’s long-term prospects have disappeared, but it does underline the gap between the expectations attached to high-growth D2C companies during the funding boom and the financial realities many are facing today.
Credits: Indian Retailer
What Lies Ahead for Sugar Cosmetics?
The immediate priority for Sugar will likely be to improve revenue growth, control losses and increase operational efficiency.
With A91 Partners continuing to back the company, Sugar has secured fresh capital to navigate its current challenges. The bigger test will be whether the brand can convert its existing consumer recognition and retail presence into sustainable growth.
For India’s D2C sector, Sugar’s valuation reset is also a reminder that strong branding and rapid expansion alone are no longer enough. Investors are increasingly looking for businesses that can demonstrate durable revenue growth, healthy margins and a clear path to profitability.
