Honasa Consumer Pvt. Ltd, the parent company of Mamaearth and The Derma Co, has picked up majority stake in a skincare brand Dr Sheth’s, two individuals familiar with the development told VCCircle.
Mamaearth, which turned unicorn last December, has invested around Rs 28 crore in the skincare products maker, which targets the luxury segment.
As part of the transaction, Varun Alagh, co-founder of Mamaearth, has also joined Dr Sheth's board, the individuals added.
Founded in 2016, Dr Sheth’s manufactures personal care products such as sunscreens, brightening cleansers, anti-oxidant moisturisers, toners, masks, eye creams and peels. It claims its products are vegan and free from chemicals such as paraben, sulphates or phthalates. The company is backed by Mumbai Angels.
Some of the popular products by the brand are - Amla VC20 Vitamin C Serum, Haldi and Hyaluronic Acid Sleeping Mask, Cica and Ceramide Overnight Repair Serum, among others. With over 30 stock-keeping units (SKUs), the brand is said to have catered to over 200,000 consumers.
Both the companies confirmed the development.
"We will utilize our expertise and proficiency in digital marketing to accelerate the growth and scale growth for Dr. Sheth’s and we are confident that we will make it a 100 cr run rate brand in 2 years," said Alagh.
"They (Honasa Consumer) bring a level of operational excellence that will make our expertise and our products accessible to a wider community. Their experience as a house of brands will also help us optimize our innovation and bring about a great range of skincare that combines the best of both worlds - science and nature," said Aneesh Sheth, CEO at Dr Sheth’s.
Honasa Consumer has been on an acquisition spree as the company is eyeing to build a ‘house of brands,’ a strategy that is fast gaining traction of late.
In February this year, Mamaearth bought BBlunt Salons, operated by Bhabani Blunt Hair Dressing Pvt. Ltd, a subsidiary of Godrej Consumer Products Ltd (GCPL), and BBlunt, a hair colour and styling products brand owned by GCPL for Rs 134 crore to make forays into hair color and hairstyling category.
In December 2021, Honasa Consumer had bought content platform Momspresso in a bid to expand its consumer engagement strategies.
The brand became one of the very few unicorns such as Nykaa and OfBusiness to turn profitable in India. While Honasa Consumer had not managed to clock a profit even at EBITDA (earnings before interest tax depreciation and amortisation) level until FY20, a strong growth in its financials for FY21 suggests that demand for D2C products has surged since the onset of the pandemic.
The company currently has a portfolio of 140 products under Mamaearth and 40 products under The Derma Co.
Fund-raising activity in the broader beauty and personal care (BPC) segment has risen over the last few months.
For instance, earlier this month, content-to-commerce platform, the Good Glamm Group, was said to be in talks with sovereign and pension funds to close a $250 million (Rs 1,911 crore) round of funding.
Naturohabit Pvt. Ltd, which runs personal care brand Nat Habit, has raised $4 million (around Rs 30 crore) in its Series A funding led by Fireside Ventures, along with participation from existing investors a couple of weeks ago.
In March, personal care brand Plum raised $35 million as a part of its Series C funding led by growth-stage investor A91 Partners.
The same month, VCCircle reported that another personal care brand mCaffeine has raised $15-20 million in a new round of funding from new investor Singularity AMC and existing institutional backer Amicus Capital.