Sugar Cosmetics raises Rs 144 Cr at Rs 755 Cr valuation; early investors seek steep discount exits
- ByStartupStory | September 7, 2026
Sugar Cosmetics, once among the better-known names in India’s D2C beauty wave, has raised Rs 144.5 crore from existing investor A91 Partners as the company faces continued pressure on revenue and profitability. The funding comes alongside efforts by some early investors to find buyers for their stakes at steep discounts to the company’s peak valuation.
The board approved the allotment of 1,12,248 Series CCPS at an issue price of Rs 12,871 per share to raise Rs 144.5 crore, according to regulatory filings. A91 Partners subscribed to the entire issue.
Based on the allotment and resulting shareholding, Entrackr estimates that the transaction values Sugar at around Rs 755 crore post-money, 75% below its peak valuation of around Rs 3,000 crore. A91 will hold around 19.97% in the company following the new round.
On Friday, ET reported that the firm was raising Rs 140-150 crore from A91 at a valuation of Rs 500-600 crore.
The latest primary round is also taking place as some existing investors explore secondary exits. Sources said investors are looking to sell stakes worth up to Rs 150 crore. Some early backers have been approaching potential buyers at steep discounts to Sugar’s peak valuation.
Entrackr has also learnt that a consulting firm has been pitching Sugar shares at a fraction of its peak valuation, with a minimum transaction size of around Rs 25 crore. The discussions underline the extent of the valuation correction since the peak of the D2C funding cycle.
Sugar was valued at around $400 million, or roughly Rs 3,000 crore, in 2022 when it raised $50 million in a Series D round led by L Catterton. At the time, the company was expanding its offline retail footprint and had emerged as a prominent youth-focused cosmetics brand.
The business has since lost momentum. Sugar’s revenue declined 20% to Rs 404 crore in FY25 from Rs 505 crore in FY24, while its net loss almost doubled to Rs 135 crore from Rs 68 crore.
Founded by Vineeta Singh and Kaushik Mukherjee, Sugar started as an online-first beauty brand before building a sizable offline presence. It sells makeup and personal care products through marketplaces, its own platform and a network of retail outlets.
The latest round paints a very different picture from Sugar’s 2022 fundraise. A91, which already held roughly a fifth of Sugar, is putting fresh capital into the company even as other investors look for exits at sharply lower valuations.
For Sugar, the funding provides capital to stabilise the business, but also marks a clear reset in investor expectations. It now needs to rebuild revenue, improve profitability and demonstrate stronger unit economics.
The reset, however, does not necessarily spell the end of Sugar’s growth story. Its brand recognition and distribution network give it room to recover if it can sharpen its product portfolio, improve economics and return to growth.
For early investors, the priority appears to have shifted from waiting for a large exit to finding liquidity at a fraction of Sugar’s earlier valuation. The latest round reflects how sharply expectations have changed, while leaving Sugar with the task of proving it can bounce back.
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