Funding Alert

Clensta in Advanced Talks to Raise $10 Million in Series B Funding, Amazon Expected to Join as Investor

• ByStartupStory     |    October 8, 2024

Personal-care brand Clensta, backed by actor Parineeti Chopra, is in advanced discussions to raise $10 million (approximately Rs 83 crore) in a Series B funding round, with Amazon likely to join as a new investor, according to sources close to the matter told Moneycontrol.

The round is expected to be led by existing investor TradeCred, while other participants include Arrow Capital and Singapore-based Jafco Asia. While the final terms of the deal are still being negotiated, the involvement of these major players signals significant backing for Clensta’s growth plans.

Confirming the talks, Clensta co-founder Puneet Gupta said, “We are in advanced discussions with several global venture capital firms. Due to confidentiality clauses, I’m unable to disclose the identities of all investors at this stage. However, I can confirm that there are significant players involved.”

Amazon’s Entry Via SMBhav Venture Fund

US tech giant Amazon is expected to make its investment through its $250 million SMBhav Venture Fund, which was launched in 2021 to support small and medium-sized businesses (SMBs). While the fund originally focused on SMBs, it has since expanded to include direct-to-consumer (D2C) brands, fintech, and gaming sectors.

Gupta confirmed that Amazon was in discussions but added, “The Series B round is targeted around $10 million, though this figure may vary slightly as we continue discussions with potential investors.”

Amazon’s D2C investment portfolio already includes brands such as GoodGlam Group, FreshToHome, XYXX, Hopscotch, and Innovist, and Clensta could be the latest addition to this growing list.

Scaling Omni-Channel Strategy

The funds raised in this round are intended to fuel Clensta’s omni-channel strategy, which focuses on expanding its offline presence. The company is also set to use the new capital to scale domestic and international operations, expand its product lines, and deepen retail partnerships.

“Ashish joined Clensta as co-founder last year before the Mamaearth IPO. Since his joining, I’ve stepped back from day-to-day operations to focus on product innovation. Under his leadership, our offline expansion strategy has accelerated significantly, and he’s been driving growth initiatives across key channels,” said Gupta.

The brand, known for its waterless shampoo and body bath products, has developed a portfolio of around 70 products with over 80 SKUs. These products, developed at IIT-Delhi, leverage patented technologies like STAR (Safe Transdermal Absorption of Reactive ingredients) to improve personal-care product efficacy.

Clensta has already recorded Rs 78 crore in revenue for FY24, marking a 129 percent year-on-year growth from Rs 34 crore in FY23. The company is targeting an annual recurring revenue (ARR) of Rs 300 crore by the end of FY25, which translates to a monthly recurring revenue of Rs 25 crore.

Salary Delays Amid Growth

Despite this rapid growth, Clensta has faced some financial hurdles, particularly in meeting salary and vendor payments. The prolonged process of closing the Series B funding round, which began in January 2024, has exacerbated the situation.

Several employees have reported delays in salary payments for August and September. Addressing these concerns, Gupta acknowledged the delays, stating they were linked to new performance-based KPIs introduced by co-founder Ashish Mishra.

“There has been a slight delay in August and September salaries due to adjustments tied to new KPIs Ashish introduced, linking salaries with sales performance. Salaries are set to be disbursed by the 10th (October). We are committed to resolving this, and Ashish is actively managing the KPIs to ensure targets are met and payments are streamlined moving forward,” said Gupta.

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