Indian cosmetics startup bags $21m in Elevation Capital-led round

India-based Sugar Cosmetics has announced it will raise US$21 million in a series C funding round led by Elevation Capital, the company’s newest shareholder.

Co-founders Vineeta Singh and Kaushik Mukherjee/ Photo credit: Sugar Cosmetics

Existing investors A91 Partners, India Quotient, and venture debt firm Stride Ventures also participated in the round of funding. Vertices Partners acted as legal counsels for the company in the round.

Sugar Cosmetics creates beauty products in the lips, eyes, face, nails, and skin categories, among others. The company’s distribution network includes over 10,000 retail outlets across more than 130 cities in India. Products of the firm are made in facilities across Germany, Italy, India, USA, and Korea.

“While the Covid-19 disruption was a spanner in the works, we were quick to bounce back to 150% of our pre-Covid revenues last quarter and that too profitably,” claims Vineeta Singh, co-founder and CEO of Sugar Cosmetics.

Funds raised from the financing round will be used to build digital and retail distribution channels to extend its reach in existing and new geographies.

The company in a statement said it had closed FY2020 with a net revenue of 1.05 billion rupees (US$14.4 million) and is currently at an annual net revenue run rate of about 2 billion rupees (US$27.4 million). It aims to double its annual revenue run rate in the next 12 months.

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Sugar also expects to surpass over 40,000 outlets in terms of distribution of its products by the end of 2021.

Stride Ventures, which has backed the company in the funding round, is in the process of closing its first India fund at 3.5 billion rupees (US$47.8 million), and is also planning to launch a second, larger fund later this year.