Beauty and lifestyle omni-channel company Nykaa said on Friday it has acquired skincare brand Dot & Key for an undisclosed sum. This is the first direct-to-consumer (D2C) beauty brand acquired by Nykaa, following which Dot & Key will join Nykaa’s stable of owned brands.
Operated by Dot & Key Wellness Pvt Ltd, the brand was founded by Suyash Saraf and Anisha Saraf, and offers premium skincare products such as serums, face masks, toners, and cleansers. The brand has recently expanded into nutraceuticals under the brand ‘IKWI’, whose products the company claims to be are dermatologically tested and cruelty-free. CEO Falguni Nayar said Dot & Key will allow Nykaa to extend the brand’s reach to a larger landscape of consumers and enter the nutraceutical space as well.
Nykaa has been expanding its fashion business with a couple of acquisitions over the past two years. In 2019, it acquired women styling platform 20Dresses.com. In April, Nykaa acquired jewellery etailer Pipa Bella, a brand that targets 22-35-year-old urban women. Pipa Bella had secured funding from early-stage venture capital firm Fireside Ventures in 2018 and previously in 2015, it had secured $600,000 in a pre-Series A round led by LionRock Capital.
The acquisition also comes at a time when Nykaa is gearing up towards its initial public offering (IPO). Nykaa which is operated by FSN E-Commerce Ventures Ltd will open its IPO subscription on 28 October and close on 1 November. The firm plans to raise as much as Rs 5,200 crore and anchor placement will open on 27 October for Rs 2,340 crore, two persons familiar with the deal said on condition of anonymity.
Nykaa will be allocating Rs 35 crore from the issue to invest in its arms FSN Brands and Nykaa Fashions for funding the setup of new retail stores. Another Rs 35 crore and Rs 130 crore will be used for capital expenditure and repayment of debt. Currently, Falguni Nayar Family Trust and Sanjay Nayar Family Trust hold 22.33% and 25.72% stake, respectively, in the firm. The company will also use Rs 200 crore for expenditure to enhance the visibility and awareness of its brands.
Nykaa was set up in 2012 by investment banker-turned-entrepreneur Falguni Nayar, who was a managing director at Kotak Mahindra Capital. Its online marketplace sells products for both women and men in categories including skincare, haircare, fragrances, bath and body, and luxury products. The company has become an omnichannel lifestyle retailer with over 17 million monthly active users, over 70 stores across India, and fulfilling over 1.5 million orders a month. It offers 4,078 brands and over 3.1 million product stock-keeping units (SKUs) through its website and mobile applications as of August 31, 2021.