Mumbai-based D2C brand SUGAR Cosmetics is gearing up for its next phase of growth, having secured ₹38 Cr ($4.5 Mn) from existing investors, including Anicut Equity Continuum Fund, Elevation Capital, Malabar Investments, and L Catterton. The latest funding round keeps the company’s valuation steady at ₹2,600–₹2,700 Cr, mirroring its 2022 valuation when it raised $50 Mn.
Credits: Indian Retailer
This development underscores the brand’s focus on expanding its product lines and improving financial performance in a competitive beauty and personal care market.
A Decade of Building a Beauty Powerhouse
Founded in 2015 by the husband-wife duo Vineeta Singh and Kaushik Mukherjee, SUGAR Cosmetics began as a purely online venture, riding the wave of India’s emerging direct-to-consumer (D2C) revolution. Over the years, the brand has transitioned into an omnichannel player, boasting a retail presence in over 45,000 stores across India.
SUGAR has consistently innovated to cater to India’s growing beauty-conscious audience, competing with stalwarts like Mamaearth, Nykaa, Maybelline, and L’Oréal. Backed by around $90 Mn in funding so far, the brand has become synonymous with affordable, high-quality beauty products designed for Indian skin tones.
Funding to Fuel Skincare and Affordable Cosmetics Growth
According to SUGAR’s co-founder and COO, Kaushik Mukherjee, the fresh funds will be channelled toward expanding two key verticals:
Quench Botanics: The Korean skincare brand, launched last year in collaboration with Bollywood star Kareena Kapoor, has seen a surge in popularity, especially across quick commerce platforms and ecommerce portals. Mukherjee confirmed that investments in FY25 would prioritize scaling this promising brand further.
SUGAR POP: The company’s affordable range of color cosmetics, aimed at budget-conscious consumers, is also set to benefit from additional investments to build out its distribution network and improve accessibility.
This dual focus positions SUGAR to cater to both premium and affordable segments, ensuring that the brand remains competitive across a diverse customer base.
Stronger Financials and Focus on Profitability
SUGAR’s FY24 financial performance reflects its commitment to sustainable growth. The brand reported an operating revenue of ₹505.1 Cr, a 20% increase from ₹420 Cr in FY23. While the startup is scaling, it is also addressing profitability challenges, narrowing its losses by 11% to ₹67.6 Cr during the same period.
“Our investments aren’t just about scale; they are about improving the bottom line,” said a source close to the company. This strategy aligns with market dynamics, where investors increasingly prioritize profitability over pure growth.
Strategic Moves in the Beauty Ecosystem
The latest funding round isn’t SUGAR’s only recent financial milestone. In 2023, Malabar Investments acquired a ₹80 Cr stake in the company from early investors India Quotient and RB Investments. Industry insiders hint at the possibility of another secondary transaction in 2025, which could allow early investors to exit while bringing in fresh capital for scaling.
SUGAR’s proactive approach to funding reflects its agility in navigating the competitive Indian beauty market, which is expected to grow at a compound annual growth rate (CAGR) of 10% over the next decade.
Credits: Mint
Omnichannel Strategy as the Key to Success
While SUGAR began its journey as a digital-first brand, it quickly adapted to the omnichannel model, becoming a retail force. Its presence in tens of thousands of stores complements its robust online distribution, giving it an edge in a landscape where seamless offline-online integration is becoming critical.
In recent months, SUGAR has also strengthened its partnerships with ecommerce platforms and quick commerce services, which have emerged as crucial sales channels for beauty products.
A Competitive Landscape with High Stakes
Established firms like Nykaa and Mamaearth, who have also garnered media attention for their expansion and initial public offerings, are fierce rivals of SUGAR. Global behemoths like Maybelline and L’Oréal, who have extensive financial resources and international experience, are another threat to the brand.
But SUGAR has a distinct edge thanks to its indigenous identity, in-depth knowledge of Indian beauty trends, and price awareness. It stands out in an increasingly crowded industry thanks to its emphasis on inclusive cosmetic products made for a range of Indian skin tones.
