Newly minted unicorns are poised to plummet even as many Indian startups backtrack on plans to go public amid the ongoing recession.
Direct-to-consumer unicorn Mamaearth has filed for an IPO. Mamaearth’s parent company, Honasa Consumer Ltd, has submitted a DRHP (Draft Red Herring Prospectus) to his SEBI. Through this offer, new shares worth Rs 400 crore will be issued in addition to the Offer for Sale (OFS) component of 46.82 million shares. If Mamaearth’s IPO goes through, it would be the first example of a new-age direct-to-consumer company going public.
Through the proposed sale, Mamaearth co-founders Varun Alagh and Ghazal Alagh will sell a portion of their stake in the company. Investors such as Sofina, Fireside Ventures, Evolvence India and Stellaris, as well as angel investors such as Snapdeal founders Kunal Bahl, Rohit Bansal, Marico’s Rishabh Mariwala and actor Shilpa Shetty Kundra also hold some stakes. to sell.
This is rapid progress for Mamaearth, who became a unicorn just 12 months ago. Besides his Mamaearth, a leading beauty and cosmetics brand, the company also operates brands such as skin and hair care brand The Derma Co, hair care brand BBlunt and Ayurvedic brand Ayuga promoted by Shilpa Shetty. increase.
MamaEarth was founded in 2016 by husband-and-wife duo Varun Alagh and Ghazal Alagh. Varun Alagh has a degree from the Delhi College of Engineering and her XLRI and has worked for several consumer brands such as Hindustan Unilever and Coca Cola. Ghazal Alagh graduated from Punjab University with her IT degree and has been working as an artist and her work has been exhibited nationally and internationally. Together they founded MamaEarth, a direct-to-consumer brand that specializes in baby and toddler products.
MamaEarth has rapidly grown on the pitch of providing safe and natural products for babies. According to the company, all products undergo multiple testing processes, including clinical dermatological testing in Europe, to ensure they are high-quality products that meet global standards. MamaEarth offers over 80 toxin-free natural products, including bamboo-based baby wipes, face masks, lotions, and hair care products. Mama Earth also got extra publicity when Ghazal Allah appeared as one of her shark girlfriends on the hit TV show Shark Tank. His Mamaearth for the year ended March 2022 reported an operating income of Rs 943 crore and his profit of Rs 140 crore.
Mamaearth goes public at a time when several new-age startups are rethinking their IPO plans. Mobikwik applied for his Rs. In July 2021, he had planned his IPO for Rs 190 billion, but announced in November of the same year that he would postpone the plan. In November 2021 PharmEasy applied for his Rs. 6.25 billion IPO, but pulled out in August this year. Last November, Droom also applied for his Rs. It was a Rs 300 crore IPO but withdrew the application earlier this month. Oyo Rooms had also filed for his IPO, but has now postponed the plan. Same for his D2C brand, he had filed for his IPO in January 2022, but dropped that plan in October.
A Mamaearth IPO would be a win not only for India’s startup ecosystem, which was hit by fundraising last winter, but also for its D2C space. There’s no shortage of his D2C brand proliferating across the country, selling everything from clothing to electronics. Seeing one of his brands go public would prove the legitimacy of their business model. Mamaearth started off by becoming India’s first Startup Unicorn of the Year in 2022. In 2023, he can start by listing as his first D2C brand in India.