NEW DELHI: Beauty and fashion e-commerce platform Nykaa on Friday announced the acquisition of homegrown skincare brand Dot & Key, making it the first direct-to-consumer (D2C) beauty brand acquired by the soon-to-be listed company.
Following the investment, Dot & Key will join Nykaa’s stable of owned brands, the company said in a statement.
Nykaa, part of FSN E-Commerce, was founded in 2012 by Indian entrepreneur Falguni Nayar.
Direct to consumer brands, especially in the personal care and beauty categories, have proliferated over the last few years hoping to bridge the gap between mass and premium brands.
Dot & Key, founded by Kolkata-based Suyash Saraf and Anisha Saraf, sells skincare products such as serums, face masks, toners, and cleansers. The brand recently expanded into nutraceuticals under the brand ‘IKWI’, whose products are dermatologically tested and cruelty free.
Ernst & Young LLP was the exclusive advisor to Dot & Key on the deal. FSN E-Commerce did not disclose the deal size.
“Dot & Key’s product range presents an exciting opportunity for Nykaa as it allows us to extend the brand’s reach to a larger landscape of consumers and enter the nutraceutical space as well. Dot & Key is a consumer centric brand with a growing base of consumers and a range of skincare solutions,” said Falguni Nayar, Founder and CEO, Nykaa.
Dot & Key will use the Nykaa platform to scale its presence in the India skincare business.
“Nykaa’s position in the beauty landscape in India and its resources will allow Dot & Key to grow further as a brand and scale to the next level,” said Suyash Saraf, co-founder, Dot & Key.
The Indian beauty and personal market is expected to hit ₹2 trillion by end of calendar year 2025, according to a report by brokerage Motilal Oswal. The online market for such products is expected to grow at a faster clip, driven by a higher propensity to shop online, large millennial and Gen-Z populations coupled with rising influence of social media.
Nykaa offers 4,078 brands and over 3.1 million products through its website and mobile app. The platform has over 15 million registered users, and fulfils over 1.5 million orders a month.
It has been able to carve out a niche for itself through excessive focus on beauty and personal care which differentiates it from horizontals such as Flipkart & Amazon, Jefferies said in a recent report on the company.
While it has a wide assortment of products under its own in-house beauty brand, Nykaa’s move signals consolidation among smaller, internet-first homegrown brands. The investment also comes right before its much-anticipated initial public offering or IPO.
Earlier this year, Nykaa Fasion, the fashion e-commerce platform of Nykaa, announced the acquisition of online jewellery brand Pipa Bella.
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