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Nykaa Completes Acquisition of Additional 39% Stake in Dot & Key for INR 265.3 Cr

• ByStartupStory     |    September 23, 2024

Beauty and ecommerce giant Nykaa has completed the acquisition of an additional 39% stake in the Kolkata-based skincare brand Dot & Key for INR 265.3 Cr, according to an exchange filing made on Saturday, September 21. This acquisition raises Nykaa’s total shareholding in Dot & Key from 51% to 90%.

Last month, Nykaa announced plans to purchase 5.29 lakh equity shares of Dot & Key from promoters and existing shareholders, solidifying its position as the majority stakeholder. Dot & Key was Nykaa’s first direct-to-consumer (D2C) brand acquisition, with Nykaa initially acquiring a 51% stake in 2021.

Founded in 2018, Dot & Key offers differentiated skincare solutions and has seen impressive growth since its acquisition. The brand’s revenue surged by 244% in FY24, reaching INR 198.3 Cr, up from INR 57.7 Cr in FY23. Nykaa previously reported that Dot & Key has been profitable since Q4 of FY23.

In Nykaa’s Q1 FY25 earnings statement, founder and chairperson Falguni Nayar commented on the acquisition: “This has been a fantastic investment by Nykaa and (that’s why we have) decided to go ahead and acquire an additional 39% stake… What we like about Dot & Key is it has a differentiated assortment. It also has clutter-breaking packaging, unique and patented.”

This latest move by Nykaa is part of its broader strategy to strengthen its position in India’s rapidly growing beauty and personal care sector, which is expected to become a $28 Bn market by 2030, representing 7% of the overall ecommerce market.

Besides Dot & Key, Nykaa has also announced plans to acquire an additional stake in Earth Rhythm, another D2C beauty brand. Nykaa will be investing INR 44.5 Cr to increase its stake in Earth Rhythm by September 2025. Founded in 2019, Earth Rhythm has over 250 SKUs and saw its revenue grow 20.3% to INR 30.7 Cr in FY24, compared to INR 24.5 Cr in FY23. Nykaa initially acquired an 18.6% stake in the brand in 2022.

Nykaa is also intensifying efforts to improve its logistics and customer experience. CEO Falguni Nayar highlighted the company’s focus on faster deliveries during Nykaa’s 12th annual general meeting. “The company is now delivering 60% of its orders within the next day across top 110 cities, which account for two-thirds of the company’s overall order volumes,” she said.

International expansion is also a key focus for Nykaa. The company has incorporated two new subsidiaries under the brand name Nysaa in Qatar and Saudi Arabia to tap into the lucrative Gulf Cooperation Council (GCC) market, where per capita spending on beauty and personal care products is among the highest in the world at $500 per annum.

With these strategic acquisitions and expansions, Nykaa continues to fortify its presence in both the Indian and international beauty and personal care markets.

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