“Dot & Key will join Nykaa’s stable of owned brands,” India’s biggest etailer of cosmetics says. The acquisition appears days ahead of the Nykaa IPO that’s expected to launch on October 28 to raise as much as Rs 5,200 crore. The terms of the deal weren’t revealed. This is the first acquisition by the Falguni Nayar-led startup in the direct-to-consumer space. The deal, however, is indicative of the broader churn that’s afoot in the sector. “Following this investment by Nykaa, Dot & Key will join Nykaa’s stable of owned brands” according to a statement released on Friday.
Founded by Suyash Saraf and Anisha Saraf, Dot & Key makes skincare products such as serums, face masks, toners and cleansers. The brand recently extended into nutraceuticals under the brand ‘IKWI’, whose products are dermatologically tested and cruelty-free.
“We are excited to bring Dot & Key into the Nykaa family in time to serve the demand in high-quality skincare by Indian consumers,” Nayar said. “Its product range presents an exciting opportunity for Nykaa as it allows us to extend the brand’s reach to a larger landscape of consumers and enter the nutraceutical space as well.”
Ernst & Young LLP was the exclusive advisor to Dot & Key on the deal.
“We created a niche brand with Dot & Key, focused on making products based on consumer needs. Nykaa’s position in the beauty landscape in India and its resources will allow Dot & Key to grow further as a brand and scale to the next level,” stated Suyash Saraf.
Nykaa’s parent firm, FSN E-commerce Ventures Ltd. plans to start its IPO on October 28 to raise as much as Rs 5,200 crore at a valuation of up to $7.2 billion (~Rs 55,000 crore), ETtech reported on Thursday, citing people aware of the matter. According to IPO papers approved by the markets regulator, the issue will be a mix of Rs 630-crore in fresh stock and an offer for sale of 41.3 million shares by existing investors.
Nykaa 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. The firm is among the few profitable etailers in India. In the fiscal ended March 31, its net profit stood at Rs 61.96 crore as against a net loss of Rs 16.34 crore a year ago, on the back of revenue that rose 38% to Rs 2,453 crore in FY21.