At USD 1.2 billion, FMCG start-up Honasa becomes first unicorn of new year; raises USD 52 mn in latest funding round

Personal care-focused e-commerce platform Honasa Consumer, which sells its products under the labels of Mamaearth, The Derma Co and House of Brands, on Saturday said it has raised USD 52 million in the latest funding round led by Sequoia, valuing it at USD 1.2 billion, thus becoming the first unicorn in the new year.

The new funding round also had participation by Belgium-based investment fund Sofina Ventures and the UAE-based India-focused fund Evolvence Capital, said the Gururam-based firm.

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The company had earlier raised funds from Fireside Ventures and Stellaris Venture Partners.

The round has also given its employees an opportunity to monetise their vested ESOPs (employee stock option plans).

Honasa plans to deploy the funds to expand its portfolio of personal care D2C (direct-to-consumer) brands, product innovation, distribution and marketing, the company said in a statement on Saturday.

Recently, it entered the skincare segment with Aqualogica, a hydration-based skincare brand. It also has plans to use the funds for inorganic growth opportunities in the beauty and personal care segments.

Honasa co-founder and Chief Executive Officer Varun Alagh said their flagship brand Mamaearth is a leader in the D2C personal care segment and The Derma Co is on a path to success.

Sequoia, Sofina and Evolvence have unique strengths in the US, European and GCC markets, respectively, which will help the firm grow internationally and learn from others in these markets, he said.

Honasa co-founder and Chief Investment Officer Ghazal Alagh said, "Since millennials' personal care concerns are dynamic and with our direct-to-consumer approach, we've been able to build an extensive portfolio of products across the baby care, skincare, haircare and colour cosmetics under Mamaearth and a portfolio of over 40 products under The Derma Co."

Sequoia India Managing Director Ishaan Mittal said that as the discovery and consumption of FMCG brands are getting more influenced by digital channels, it is providing a unique opportunity to founders to build brands of the future. "Mamaearth has established itself as a clear market leader in this digital-first consumer goods space and Sequoia is delighted to double-down on the partnership in this journey."

Rohit Batra, managing partner at Evolvence, said he believes that the GCC (Gulf Cooperation Council) market will be receptive to the Honasa brands, especially Mamaearth, and initial signs have been encouraging as the company scales in the region.

Set up five years ago, Honasa reaches out to over 1,000 cities with its brands like Mamaearth, The Derma Co and Aqualogica. It claims to have cumulatively sold them worth USD 1 billion.