Mamaearth targets valuation of $3 billion in IPO, likely in 2023

27 Jun 2022 , 11:12 AM

Indian skincare startup Mamaearth is planning to raise at least $300 million in a planned IPO next year and is seeking a valuation of around $3 billion, media reports suggest.

Mamaearth, which was founded in 2016, has gained popularity in India for its line of “toxin-free” products such as face washes, shampoos, and hair oils. In the booming personal care industry, Mamaearth competes with Unilever’s India unit, Hindustan Unilever NSE, and Procter & Gamble Co.

The company was last valued at $1.2 billion in January of this year when it raised new funds from investors such as Sequoia and Sofina of Belgium.

Sources suggest, Mamaearth is aiming for a valuation of around $3 billion – 10-12 times forward earnings based on sales growth and future revenue potential. It intends to file draft regulatory papers by the end of this year.

Mamaearth’s IPO plans coincide with a broader downturn in capital markets and a slowdown in India’s thriving startup ecosystem, which raised a record $35 billion in funding last year. According to Reuters, some startups are reducing staff and having difficulty raising funds.

Varun Alagh, a former Hindustan Unilever executive, and his wife Ghazal co-founded Mamaearth. With popular Bollywood celebrities endorsing the brand, the duo has capitalized on growing e-commerce adoption in India by offering its products on platforms such as Amazon and Walmart’s Flipkart.

Although online platforms account for 70% of Mamaearth’s sales, the company plans to expand its offline presence this year, with the goal of reaching 40,000 retail outlets in 100 cities.