Online cosmetics retailer Purplle raised capital at a $1.1 billion valuation, becoming the second billion-dollar company to be created in India this week despite souring investor sentiment on start-ups.

The Mumbai-based firm raised $33 million of Series E financing from South Korea’s Paramark Ventures as well as existing backers Blume Ventures, Kedaara and billionaire Azim Premji’s Premji Invest, the company said in a statement.

Backed by Goldman Sachs Group Inc., Purplle is a prominent rival of Nykaa, whose parent FSN E-Commerce Ventures Ltd. pulled off one of India’s most successful market debuts just before global investment conditions tanked. Nykaa is currently valued at $8.7 billion.

“Consumer products makers may be seeing inflationary pressures, but Purplle continues to clock 70 percent year-on-year volume growth,” co-founder Manish Taneja said in an interview, without specifying timeframes. “Innovation in the beauty market is digital-first.”

India now has over 100 unicorns. This week, edtech start-up Physicswallah raised $100 million from backers including WestBridge Capital and GSV Ventures at a $1.1 billion valuation.

Purplle, which has secured $215 million of total funding, will use the new capital to step up investments in technology, develop its private labels and strengthen its product.

Known formally as Manash Lifestyle Pvt, Purplle was set up in 2012 by Taneja, Rahul Dash and Suyash Katyayani, three engineers from the Indian Institute of Technology. It handled $180 million of gross merchandise value in the year ending March, offering 60,000 beauty and personal care products and accessories from over 1,000 brands on its website and app.

Niche players in beauty, fashion, grocery and other industries have experienced rapid online sales growth since the start of the pandemic. Purveyors of beauty products in particular have seen growth spike by targeting young consumers. The beauty and wellness category is under-served by brick-and-mortar retailers, leaving opportunities for internet-based start-ups like Purplle.

Purplle targets middle-class buyers from smaller Indian towns who look for value. Like Nykaa, it sells its own products under a private label. Indian consumers are increasingly taking to these newer, aggressively-priced brands, many of which tout chemical-free products. But the market is heating up with new competition emerging from players such as MyGlamm, backed by Amazon.com Inc.

By Saritha Rai

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