“Most VCs are gentlemen they do not understand why a consumer might need to have a lipstick that lasts a few hrs longer,” Vineeta Singh, Co-founder of SUGAR Cosmetics, informed YourStory Founder and CEO Shradha Sharma, when questioned about the lots of troubles that SUGAR faced even though seeking to elevate resources.
Co-founders and daily life companions Vineeta and Kaushik Mukherjee in 2012 commenced Fab Bag, a every month makeup and natural beauty membership system for girls. In 2015, the duo made the decision to pivot and concentration complete time on cosmetics produced precisely for the Indian girl.
But the heading wasn’t simple.
The Mumbai-dependent D2C manufacturer did not even have sufficient income to even import its 1st batch of lipsticks, which ended up produced in Germany.
Factors have adjusted five many years down the line.
The ladies-centric D2C manufacturer, with a concentration on core enterprise fundamentals and an innate understanding of the consumer and her wants, showcased an unrelenting under no circumstances-give-up spirit to endure one of the longest waits for funding – 58 months from seed to Series A.
But participating in the waiting around game helped SUGAR score.
In February 2021, the cruelty-cost-free manufacturer raised $21 million in a Series C funding spherical led by Elevation Money (formerly SAIF Companions), with existing buyers A91 Companions and India Quotient collaborating, and strategic undertaking credit card debt from Stride Ventures.
In the course of a recent episode of Revenue Issues with Shradha Sharma, Vineeta stated SUGAR Cosmetics has been worthwhile due to the fact the final quarter. The cosmetics startup, which functions on a hybrid design, now has a presence in 10,000-furthermore retail retailers across 130-additionally cities. It has recorded about 6x growth in its revenues in the last two several years.
Using the omnichannel route
SUGAR was crafted focusing on the new-age millennial lady. “They are pretty various from their mothers — they put on makeup on a frequent basis, and not just for specific occasions and weddings they are motivated by other serious women and not starstruck by celebs and they shop on line,” Vineeta describes.
This is why the founders determined to launch SUGAR as a digital-initial model.
Having said that, 95 % of the Indian splendor and cosmetics marketplace is offline. Though COVID-19 has led to disruptions, Vineeta believes that only 15 % of the total natural beauty and cosmetics marketplace will shift on-line in the future 5 years.
“To give a good fight to the Unilevers and the L’Oreals, we had to build omnichannel distribution. And so, we embarked on our retail journey,” she suggests.
SUGAR focuses on a few primary variables: creating products that are long-long lasting, climate-proof, and acceptable for the tropical Indian climate.
Marrying information and commerce
A whole lot of providers conclusion up shelling out revenue on acquiring shoppers, but SUGAR decided to acquire a distinct route – balancing manufacturer internet marketing with material internet marketing.
“Performance marketing and advertising is the best way to mature ecommerce companies,” Vineeta points out. Originally, 95 percent of SUGAR’s investing was on overall performance internet marketing.
Now, material marketing is extremely significant for SUGAR’s enterprise. First of all, simply because make-up, regardless of whether sold offline or on the internet, is dependent on training. The art of how to put on winged eyeliner or contour one’s cheeks is as significant as procuring for a distinct merchandise. Next, 95 p.c of the prospects were motivated digitally.
SUGAR leveraged Instagram and YouTube for visible storytelling about make-up. “We figured that we had the chance to construct ourselves as a information-pushed organization,” Vineeta says.
In the last two several years, SUGAR has on-boarded a group of females who are passionate about makeup and produce all its material in-house. Besides that, the brand name also released its personal app, presently downloaded by extra than a million users. Each thirty day period, more than 250 million men and women engage with SUGAR’s in-dwelling articles, by way of the several marketing and advertising channels.
“The just one detail that we did well was being obsessed with the concept of applying written content, electronic and social media to access the customer, and to do it in a quite capital-successful way, as a substitute of paying out on influencers,” Vineeta says.
“Forget general performance promoting target on developing the model,” she provides.
The fund-increasing journey
Raising funds has by no means come simple to SUGAR. Immediately after its pivot, the manufacturer created four shades of lipstick in its producing facility in Germany. “We knew they (the lipsticks) had been wonderful and would do effectively, but we did not have the money to import them to India, and inevitably sell them…We required some income to demonstrate that SUGAR was going to do perfectly,” Vineeta claims.
The co-founders approached IndiaQuotient, also angel traders in Fab Bag, at a time when there was no classification for D2C makes in a VC’s portfolio. “We just desired Rs 1 crore to deliver the lipsticks to India,” Vineeta reveals.
IndiaQuotient gave them the funds, and “they explained to us that regardless of what occurs, the cash should not go down. They had this insane religion in us and we created confident that we truly make that Rs 1 crore count”, she claims.
5 decades given that its pivot, SUGAR is now backed by A91 Partners and IndiaQuotient. Not long ago, it elevated $2 million in financial debt funding from Stride Ventures. The cruelty-free manufacturer clocked web profits worthy of Rs 105 crore in FY20.
“There is an inside joke with our 1st buyers, India Quotient. Whenever you examine their profile, you will see how ours is the firm which took the longest time to shift from seed to Series A round,” Vineeta jokes.
Making for India
SUGAR manufactures its items in India, Germany, Italy, and Korea, and targets the Indian millennial women of all ages. Almost 50 % of its clients are from metros, but the pandemic was an eye-opener for the cosmetics brand.
“We realised the massive variety of aspirational ladies in Tier II and III towns. They are either beginning to store on the net or be inspired by social media,” Vineeta suggests.
She believes that there is a massive prospect for SUGAR to broaden from the 10,000-as well as stores that it is offered in at current to 40,000-50,000 stores across much more than 300 cities, and have a great deal deeper distribution in Tier III and IV cities and metropolitan areas.
“We have the possible to be one particular of the top three makes in India,” Vineeta says.
SUGAR by now distributes in the US and has strategies for expansion in the Center-East markets as very well, but it in the long run wishes to continue to keep building for Indian customers. “International markets will add to 5 to 10 p.c of the earnings. Our emphasis will proceed to be India,” Vineeta suggests.
Speaking about what retains her anchored on her worst days, Vineeta suggests, “When you are working a corporation, the only issue certain is that each time you have a significant, there will be a small.” She refers to how after crossing Rs 100 crore (in earnings), SUGAR obtained enormous momentum only to plummet to zero profits when the pandemic hit.
But Vineeta, a marathon runner, is a strong believer in the energy of compounding, and the relevance of remaining affected person and reliable.
The only issue that drives her are the colleagues and investors who have supported SUGAR via thick and skinny. “I do not want to enable them down. I am not waiting around for the IPO but living the aspiration each individual day,” Vineeta claims.