Marico Ltd, the maker of Parachute hair oil and Saffola cooking oil, on Friday announced its foray into the male grooming market by picking up a stake in Zed Lifestyle Pvt Ltd, which owns Beardo.
The FMCG major, as per a stock market disclosure, acquired a 45% stake for an undisclosed amount in the Ahmedabad-based company. The equity stake shall be acquired over a period of two years, through primary infusion and secondary buy-outs.
“We are impressed with the founders and the velocity of growth of the business since inception. It fast forwards our journey towards nurturing a future-ready male grooming portfolio and brand in the online and salon space,” said Saugata Gupta, the managing director of Marico in a press note.
Zed Lifestyle, which was launched by Ashutosh Valani and Priyank Shah last June, offers growth oil, wax and shampoo for beard; wax and serum for hair; lotion, soap, and face wash for skin. The company claims to have strong presence online and at salons, and almost three-fourths of its revenue is generated through the former.
Marico, which is currently visible in the mass grooming segment through its Set Wet brand, plans to expand into categories beyond deodorants and gels. It estimates that the Rs 3,200 crore male grooming market in the country is growing at a double-digit CAGR.
Last year in September, Beardo, which is backed by Bollywood actor-turned-entrepreneur Suniel Shetty, raised $500,000 (Rs 3.32 crore) in seed funding from Mumbai-based Venture Catalysts, Raj Vazirani of RHV Enterprise, and Siddharth Somaiya of Godavari Biorefineries and Somaiya Group.
Others startups in men’s grooming segment include Bombay Shaving Company, Ustraa, LetsShave and The Man Company. Bombay Shaving Company raised Rs 4 crore (nearly $600,000) in seed funding last year, while The Man Company secured an undisclosed amount from investors in 2015.
The fast-moving consumer good (FMCG) firm had been quite active in making acquisitions, both in India and overseas, for almost eight years starting 2005 but hasn’t announced any deal since taking over Paras Pharmaceuticals in February 2012 from Reckitt Benckiser.
The company was also vying for inorganic growth opportunities in its existing markets as well as regions such as East Africa and Southeast Asia. Marico is currently present in South Africa and Egypt in Africa, Malaysia and Vietnam in Southeast Asia, apart from India and Bangladesh in South Asia and some Middle Eastern nations.
Marico embarked on its global inorganic growth journey with Bangladesh. In 2005 and 2006, the company bought soap brands Manjal and Aromatic. Also in 2006, it sealed its first deal in Africa, when it acquired two hair care brands—HairCode from The Pyramids Group and Fiancee from Ready Group—in Egypt.
In 2010, Marico bought a Colgate-Palmolive brand in Malaysia. The following year, it struck a deal in Vietnam. Its last overseas M&A deal was in 2011 when it acquired healthcare brand Ingwe from South Africa’s Guideline Trading.
In 2012, the company inked a deal to buy the personal care business of Paras Pharmaceuticals from UK consumer goods giant Reckitt Benckiser. Interestingly, Marico had previously pursued Paras Pharma for a bigger buyout but Reckitt Benckiser had clinched that deal and later put the non-core assets of Paras Pharma on the block.
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