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The Real Nykaa

How Falguni Nayar turned a beauty and fashion e-commerce platform into the only profitable unicorn to be listed in India and, in the process, also became India’s richest self-made woman billionaire is one spectacular tale

Falguni Nayar is a woman of few words. Her Twitter account, which has just one tweet posted nine years ago about Nykaa going live, is proof enough. She is someone who probably believes that actions speak louder than words. And her actions have been loud enough to break the glass ceiling and stereotypes — not just once.

When Nayar founded Nykaa, she was pushing 50 with about 20 years of experience as an ace investment banker. Today, Nykaa is listed at a valuation higher than those of some of the biggest legacy businesses in India. Nayar is also India’s richest self-made woman billionaire. A spectacular achievement for any entrepreneur anywhere.

It all started in 2012 when Nayar, the then Managing Director of Kotak Mahindra Group’s institutional equities and investment banking divisions, wanted to start something of her own. During her stint in New York and in London with Kotak, Nayar had seen entire floors of high-end department stores dedicated to cosmetics and other beauty products. But in India, apart from the metros, women still visited dingy neighbourhood “mom-and-pop” and “variety” stores for their beauty needs. Nayar wanted to change that. She wanted to create a smooth, integrated shopping experience where consumers could shop online or in physical stores for their various beauty needs.

Apart from having a strong online presence, Nykaa currently has 80 stores across three formats: Nykaa Luxe for premium brands, On-Trend for premium to masstige brands and kiosks which sell only its private labels.

“What worked for us was our relentless focus on a few key pillars — doing right by our brand partners, developing the art of retailing, focusing more on customer delight and conversions. All this, while building long-term financial sustainability,” she says.

Her experience at Kotak engrained in her the importance of being financially sustainable and having good corporate governance. Being reduced to a discount store was not how Nayar wanted to take Nykaa forward. She was here for the long haul.

“I took a giant leap of faith to build something that, at that point of time, had less believers and more naysayers — a beauty destination for all, backed by technology, content, community, and passion,” she says. Clearly, the naysayers have been proven wrong with Nayar cautiously pivoting Nykaa over the years.

After switching to an online-offline format in 2015, in 2018, Nykaa launched its fashion
vertical followed by Nykaa Man, a men’s grooming platform in 2019. Today, fashion accounts for 25% of Nykaa’s GMV (gross merchandise value).

During the pandemic, the platform pivoted to an essentials-only online store overnight, launching hand sanitisers, masks, hand washes, etc. under its private label with the aid of smart and agile tech and AI-led curated content, filtered as per the customers’ needs.

The company, which was completely family-funded for the first two years, raised funding through subsequent rounds of investment. Last year, Nykaa raised Rs 166 crore as primary invest­­ment from Steadview Capital at a valuation of $1.2 billion, catapulting it to the unicorn status.

From the money raised through the IPO, the company intends to spend Rs 42 crore in setting up retail stores and another Rs 42 crore in setting up warehouses which will act as fulfillment centres for Nykaa’s ecommerce businesses. Plus, Nykaa plans to use the proceeds to acquire more customers, launch new verticals, acquire more brands and also expand into international markets—the company intends to launch its operations in the Middle East and the United Kingdom and then move to the European market.

From selling 30 orders a day to becoming a $7-billion giant in less than a decade, Nykaa’s story is an inspiring one. And Nayar wants it to inspire everyone, especially women, to be the nayikas of their lives.