How majority family-owned Nykaa is a novelty in the startup ecosystem
When a firm was created nine years ago, more than a year after being a unicorn, and, most significantly, on the day before ringing the ceremonial listing bell following a successful initial public offering, holding more than 50% of the company is an achievement (IPO).Falguni Nayar, the Founder and Chairperson of FSN E-Commerce Ventures, the company that runs Nykaa, has done just that. Since being listed on November 10, the feat of owning 52.56 percent of a firm whose market worth swings between Rs 94,306 crore and over Rs 1.21 lakh crore based on the lowest and highest price point is anything but typical.
Compare this to other software company unicorns that have gone public in recent months through initial public offerings (IPOs). And there’s a clear’skin in the game’ difference.Consider Deepinder Goyal, the co-founder of foodtech unicorn Zomato, which went public in July and now has a 4.71 percent share. Deepinder’s stake in Zomato is worth between Rs 4,211 crore and Rs 6,247 crore at the lowest and greatest share price points after listing.
Yashish Dahiya, the co-founder of PB Fintech, which manages PolicyBazaar, owns 3.84 percent of the freshly listed internet insurance aggregator. Yashish’s stake is valued in the range of Rs 1,973 crore to Rs 2,534 crore, using the same method of the lowest and highest share price since listing.Skin in the game, according to an ex-investment banker who has been dabbling in the startup environment for some time, is a key draw for investors, both at the private and public stages. “When a promoter has too much to lose if the business enters choppy waters,” they argued, “an investor, regardless of cheque size, takes comfort.”
The shareholding pattern of Nykaa, a publicly traded startup tech unicorn, evokes strong memories of traditional family-owned firms. In actuality, Nykaa is a solid family-run corporation with family members actively involved in business operations.
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