Sugar Cosmetics seeks ₹100-150 crore rescue funding at steep valuation cut

Subscribe to enjoy similar stories.MUMBAI: Sugar Cosmetics, once among India’s fastest-growing beauty startups, is seeking a sharply discounted funding round after an aggressive offline expansion and slowing sales growth strained its finances, according to four people familiar with the matter.The Mumbai-based beauty brand has begun a process to raise ₹100-150 crore after grappling with a severe cash crunch over the past six months amid declining revenue, a shrinking offline footprint and rising employee attrition, the people said.The fresh fundraise is likely to happen at a valuation of ₹1,400-1,500 crore, sharply lower from its peak valuation of about ₹3,000 crore in 2022, two of the people said. While typical growth investors are unlikely to invest in the current state, the company will tap family offices and high net-worth individuals (HNIs) alongside some existing investors to facilitate the capital raise even as its revenue declined further to about ₹380 crore in FY26, the person added.The need for fresh capital has intensified as the company struggles to manage working capital and employee payouts.

“Some of the salaries for employees over the last month have been settled from the promoter’s personal capacity,” another person said,adding that any further strain in its working capital could affect the company’s ability to deliver orders.Mint could not ascertain whether the company had undertaken layoffs. Sugar Cosmetics did not respond to Mint’s request for comment till press time.“The company has been trying to do a sizeable fundraise for over two years now.