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Mamaearth's IPO: 7 key things about D2C unicorn that investors must watch out for

Money Control · 12m

Mamaearth, the first unicorn of 2022, is set to become the first digital-first D2C company to go public with an IPO. However, concerns arise as the company's valuation of around $1.25 billion is over 105 times its annualized FY24 earnings. Mamaearth's sales from its own websites and apps are declining, while its reliance on third-party e-commerce marketplaces is increasing. The company's advertising expenses are also rising, especially with the focus on offline sales and traditional media. The launch of new products and expansion into offline channels further contribute to Mamaearth's growth strategy. While the company emphasizes "economies of scale," it has yet to reflect profitability, with a net loss of Rs 151 crore in FY23. Employee benefit spending has been increasing, but recent efforts have been made to control this cost.