Sugar seeks $100 mn at $700-800 mn valuation

livemint.com:

MUMBAI : Direct-to-consumer (D2C) brand Sugar Cosmetics is looking to raise $100 million in a new funding round that will value the company at around $700-800 million, said three people with knowledge of the development. About 60-70% of this fundraise will happen through issuance of fresh equity and the rest through stake sales by existing investors, they said. The company is in talks with sovereign wealth funds and private equity funds to raise the amount.

However, “it is early days as the deal has just been launched," said one of the three people. “The final round construct and valuations will be determined in a few weeks," he said. A funding winter in the startup ecosystem has seen companies struggling to raise funds.

The Indian venture capital (VC) funding landscape has seen subdued activity both in terms of deal volume and volume in 2023. A total of 811 VC funding deals worth $5.5 billion were announced in the country during the first three quarters (Q1-Q3) of 2023. This represents a year-on-year (y-o-y) decline of 42.3% in terms of VC funding deals volume and a massive 70.4% fall in terms of disclosed funding value, according to GlobalData, a data and analytics company.

On the flip side, this has forced companies to be financially prudent and aim for stronger unit economics. A lot of companies in the D2C space have cut back on their marketing and growth spends to conserve cash. In July 2023, Sugar said it had current annualized sales of around ₹700 crore and was eyeing profitability in FY24.