Deep-pocketed investors have been showing interest in vertical e-commerce online beauty platforms. While SoftBank is yet to put $200 million in Nykaa, Mumbai-based Purplle has scored $30 million Series C round led by global investment banking major Goldman Sachs.
Existing backers, IvyCap Ventures, Blume Ventures and JSW Ventures also participated in the financing round. The new investment has come after the gap of three and a half years for the firm.
The company will deploy the proceeds to expand and strengthen its supply chain, marketing and technology.
The seven-year-old startup claims to have over 47,000 stock keeping units (SKUs) across more than 1,000 third-party, including in-house brands. Over the past two years, Purplle’s net merchandise value has quadrupled, claims the company in a press statement.
Founded by Manish Taneja and Rahul Dash, Purplle is looking to tap into India’s $7 billion online beauty and personal care market that is estimated to be growing at a compound annual growth rate (CAGR) of more than 15%.
Since the company has the money to drive scale and launch more own labels with this round, it expects its growth in scale and size to expand ten-fold by the end of 2023.
Previously, it raised an undisclosed amount in Series A funding from IvyCap and Blume Ventures in January 2015, followed by $6 million Series B round from JSW in July 2016. The firm also had improved its financial health drastically during FY19.
According to the annual financial report, the company is very close to turning profitable. While its revenue recorded 3X growth in FY19 to Rs 101.48 crore from Rs 31.35 crore in FY18, during the period, it managed to control its losses by over 70% to Rs 4.07 crore.
If we compare its financial with most of the growth-staged ventures in e-commerce space, certainly it stands out.
On the competition front, it competes directly with Nykaa and other horizontal majors such as Amazon and Flipkart.
Unlike most of the venture capital-backed firms, Purplle didn’t raise much capital, and instead of buying growth, it focused on building a sustainable business. Purplle also passes a vital message to the ecosystem: build a long term business and strike a balance between growth and unit economics, the capital eventually will follow you.