Lips don't lie: How Vineeta Singh's passion for the impossible led to the rise of her $500 million startup, Sugar Cosmetics!
In May 2021, L Catterton (a joint venture between Louis Vuitton & Catterton Group, a leading consumer-focused private equity firm) invested $50 million in Sugar Cosmetics, valuing the firm at $500 million. It was a testament to the drive & indefatigable spirit of Vineeta Singh, who had to work tirelessly for years to create a successful homegrown cosmetics brand in an industry that is notoriously competitive, with multinational brands like L'Oréal. Despite the deep pockets of brands like L'Oréal working in their favor, the upstart was able to leverage the Indian digital revolution to create a digital-first cosmetics brand loved by millions of Indian women. By creating a brand that focused on Indian skin tone & lifestyle, Sugar Cosmetics was able to carve a niche for itself in the beauty industry like no other domestic brand has been able to. This is the story of how a founder’s passion for the impossible led to the rise of one of the hottest brands in the Indian cosmetics industry!
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Sugar Cosmetics is actually the third venture launched by Vineeta Singh. After graduating from IIT Madras & IIM Ahmedabad, she ditched a 1 crore salary job offer from an investment firm to try her hand at entrepreneurship. Her first venture, Quetzal, a background check service for recruiters, was launched in 2007. However, the venture couldn't gain much traction over time. She tried her luck again in 2012 with Fab Bag, a beauty subscription kit business. She ran the business for 9 years and amassed over 200,000 customers. It was while running Fab Bag, that the idea for a cosmetics brand catering to Indian lifestyle & skin tone was born. Vineeta realized that none of the popular beauty & cosmetics brands in the Indian market were actually created for Indian skin tone or lifestyle. There was a gap in the market for products that were actually made for Indian women, which led to the launch of Sugar Cosmetics in 2015. However, Vineeta soon ran into a problem - none of the manufacturers were willing to manufacture products for Sugar Cosmetics unless they ordered a minimum 10,000 pieces of each SKU. The company did not even have enough money to even import its first batch of lipsticks which were manufactured in Germany!
Despite these initial struggles, Vineeta somehow managed to get the brand up and running. In the initial years, the brand was able to generate nearly INR 2 crores in revenue - a big number for a startup no doubt, but peanuts when compared to the typical revenues of cosmetics giants. As a result, no investor was willing to make a bet on this flailing upstart. Vineeta, however, was unfettered. She kept on working at engaging more and more Indian women & growing her brand. She showcased an unrelenting never-give-up spirit to endure one of the longest waits for funding - 58 months from seed to Series A. Sugar Cosmetics focused on customer education & began reaching out to customers via YouTube & Instagram. Vineeta understood that customer education was the core of her business. She also understood that it was imperative for her to take her brand omnichannel since more than 95% of the Indian beauty & cosmetics market is offline. Sugar Cosmetics wanted to be present wherever the customers shop, whether that’s a local shop, Shoppers Stop or Nykaa!
Vineeta’s unrelenting drive finally paid off as the brand started gaining traction. By 2020, Sugar Cosmetics had crossed the INR 100 crore revenue milestone - the brand generated INR 105 crore in FY20. In February 2021, the startup raised $21 million in Series C funding led by Elevation Capital (formerly SAIF Partners). The beauty brand’s current annualized revenue run rate is nearly INR 500 crore & the company plans to cross INR 2000 crore in revenue within the next 24-36 months. After dominating the digital landscape, Sugar Cosmetics is not trying to get a foothold in the offline market as well. Currently the company has over 2500 physical outlets in over 130 cities across the country. Apart from their own stores, Sugar Cosmetics has nearly 10,000 retail touchpoints. The company plans to utilize the latest funding from L Catterton to grow its retail touch points to over 40,000 outlets in 550 towns & cities across India. While the goals set by Vineeta Singh are ambitious to say the least, the beauty upstart still has an uphill battle against the likes of L'Oréal. It would be interesting to see how Sugar Cosmetics tackles the cosmetics giants on their turf!