Beauty-centric online marketplace Nykaa is in late-stage talks to acquire local discovery and e-commerce platform Little Black Book (LBB), three sources aware of the development told Entrackr.
“The two companies have been in talks for the past couple of months and Nykaa has recently given a term sheet to LBB. The deal would strengthen Nykaa’s content game and complement its lifestyle and home decor categories,” said one of the sources requesting anonymity as talks are yet to be public.
Of late, Nykaa has been acquiring stakes in companies to beef up its offerings against competitors such as Purplle and horizontal marketplaces. In April, the Falguni Nayar-led firm invested in Earth Rhythm, Nudge Wellness, and KICA. Before listing in the public market, it also took over Kolkata-based homegrown skincare brand Dot & Key. Nykaa also counts 20Dresses.com and Pipa Bella under its portfolio.
According to Entrackr’s sources, Nykaa is also in the race to acquire Times Internet-owned MensXP. Nykaa was listed on the BSE in November 2021 and its current market cap is estimated at $8.3 billion.
Started as a Tumblr blog and side-project by Suchita Salwan in 2012 and later joined by Dhruv Mathur as co-founder, LBB is a two side facing marketplace for unique lifestyle products. In September 2021, the company claimed that it served 22 million users across eight cities and had 10,000 merchants on its platform.
“The acquisition appears to be the best option for LBB which has been finding it hard to raise new rounds for a while,” said the second source who also requested anonymity, adding that the deal is on the precipice of finalization, if nothing goes wrong at the last moment.
Queries sent to Nykaa, LBB did not elicit an immediate response.
In 2021, most of the venture backed startups had raised money and some even raised back-to-back rounds. However, LBB hasn’t been able to pull off sizable funds since 2019. The 10-year-old company has mopped up around $8 million from investors such as Blume Ventures, Chiratae and Dream Incubator, as per media reports.
The pandemic also had a severe impact on Little Black Book’s scale and this could be evident from the sharp reduction in its collection during FY21. The company’s operating revenue shrank 40.97% to Rs 8.63 crore in FY21 from Rs 14.62 crore in FY20. Meanwhile, it’s yet to file its annual financial report for FY22.
Update: The post has been updated with additional information.