Venture funds in India have been moving away from technology to consumer sector for sometime. In a latest example of this, Helion Venture Partners has invested Rs 20 crore in YLG, a chain of salons and spas. The funding will be used for expansion and promotions.
This is the first round of funding for YLG, which stands for You Look Great, a company set up in 2009 by ex-employees of Future Group. The founders include Rajiv Bopaiah, who was the Chief of the health and beauty division, and Rahul Bhalchandra, who was the head of Wellness business at Future Group.
The company already has six salons in Bangalore. It plans to take to 25 stores by the end of the year, and to 100 stores nationally by 2011. “Next year onwards, we plan to hit a new city every six months,” said Rahul Bhalchandra, co-founder, YLG.
He also added that since they have launched during the slowdown, the company has been able to get properties for the stores at realistic prices. “It would be profitable for us to expand faster during the recession as we would be able to secure more properties at lower prices,” Bhalchandra added.
Kanwaljit Singh, Managing Director, Helion Advisors Pvt. Ltd., is also convinced that launching during the slowdown would not have any adverse effects on the YLG business.“ I think this (beauty) is a less recession affected space than a lot of other businesses. In India 70% of the business in the beauty salon is basically what we call hygiene services, which are fairly immune to recession because these are the things that a woman needs to do just to maintain her basic health and hygiene requirements,” he said.
YLG expects to break even for all its stores in the next 6-9 months and is looking at an anualised revenue of Rs 30 crore by the end of FY 2009-2010. The YLG team currently comprises of 150 people.
The other leading beauty salon chains include that of noted hair stylist Javed Habib, Ambika Pillai and Limelight of Cavinkare's C K Ranganathan. Asit Koticha of ASK Group has also invested in a salon business, in the Mumbai based franchisee of French salon Jean Claude Biguine (JCB) and VLCC, which has been funded by CLSA Private Equity and Indivision India Partners.