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Exclusive: Deepika Padukone’s D2C startup 82°E set to raise new capital

EntrackrEntrackr · 1y ago
Exclusive: Deepika Padukone’s D2C startup 82°E set to raise new capital
Medial

Direct to consumer personal care startup 82°E is set to mop up Rs 50 crore or $6 million in the extension of its seed round from new and existing investors. This will be the first round of investment for the Deepika Padukone-led company this year. The board at 82°E passed a special resolution to issue 50,00,000 series seed 2 CCPS at an issue price of Rs 100 each to raise 50 crore, its regulatory filing accessed from the Registrar of Companies (RoC) shows. KA Enterprises LLP, an investment entity owned by Deepika Padukone and her family, is slated to participate in the round, while other investors may join them. According to the filings, the new funds will be allocated for expansion, growth, and general corporate purposes. The company last raised $7.5 million in its seed round led by DSG Partner and IDEO Ventures along with Padukone’s family office in December 2022. According to startup data intelligence platform TheKredible, Padukone along with her family office holds 59.6% followed by actor Ranveer Singh who commands 5.32% of the company. Launched in 2022 by Padukone and Jihar Shah, 82°E is a skin and body care brand for both men and women that offers a wide range of products including cleansers, face masks, moisturizers, sunscreen, and more. 82°E displayed significant growth during the first nine months of FY24. Its revenue from operations stood at Rs 22.82 crore between March 2023 and December 2023. For context, the company collected Rs 11 crore in its operating income in FY23. The firm remained in the red with Rs 25.1 crore at EBITDA level in the same period (March 2023 to Dec 2023). 82°E competes with many brands including Plum, mCaffeine, Wow Skin Science and public company Mamaearth.

WROGN raises $9 Mn from Aditya Birla Digital Fashion

EntrackrEntrackr · 8m ago
WROGN raises $9 Mn from Aditya Birla Digital Fashion
Medial

Men’s apparel brand WROGN has raised approximately Rs 75 crore (approximately $9 million) in funding from Aditya Birla Digital Fashion Ventures Ltd (ABDFVL), increasing ABDFVL’s stake in the D2C fashion brand from 17.10% to 32.84% on a fully diluted basis, as per a stock exchange filing. Earlier, in June this year, WROGN secured Rs 125 crore ($15 million) from TMRW House of Brands, an Aditya Birla Group company. This investment saw TMRW acquiring a 16% stake in WROGN, valuing the Bengaluru-based brand at around $105 million. Aditya Birla Group’s TMRW has now backed eight Indian fashion brands, including men’s casualwear brand The Indian Garage Co, casualwear Bewakoof, athleisure brand Nobero, children’s brand Nauti Nati, denim label Urbano, and casualwear brands JuneBerry and Veirdo. Founded in 2014 by siblings Anjana and Vikram Reddy, WROGN is a leading name in casual wear, offering a wide range of apparel, footwear, and accessories. Leveraging cricketer Virat Kohli’s influence, the brand has expanded its reach through exclusive brand outlets and partnerships with major e-commerce platforms. Since its inception, WROGN has raised approximately $90 million from investors like Accel, Flipkart, Virat Kohli, and Sachin Tendulkar. In November 2020, Flipkart invested an undisclosed amount in WROGN’s Series F round. Flipkart is also an investor in Hrithik Roshan’s HRX, which competes with WROGN. WROGN’s revenue from operations dropped by 29.2% to Rs 243.75 crore in FY24, down from Rs 344.3 crore in FY23. Despite implementing cost-cutting measures, the Virat Kohli-backed brand saw its losses up by 28.2%, reaching Rs 56.76 crore compared to Rs 44.26 crore in FY23, primarily due to a sharp decline in sales. According to a recent report by TMRW X Bain & Company, the fashion and lifestyle sector is India’s second-largest consumer category, valued at $110 billion, with online sales accounting for around $11 billion, or 10% of the market.

Virat Kohli-backed WROGN’s revenue dips 29% in FY24

EntrackrEntrackr · 9m ago
Virat Kohli-backed WROGN’s revenue dips 29% in FY24
Medial

Virat Kohli-backed men’s apparel brand WROGN’s parent company has been struggling to grow, as the company’s revenue dropped by over 29% in the fiscal year ending March 2024. At the same time, the firm’s losses surged by 28.2%, nearing the Rs 57 crore mark during the same period. WROGN’s revenue from operations dwindled 29.2% to Rs 243.75 crore during FY24 as compared to Rs 344.3 crore in FY23, its consolidated financial statements sourced from the Registrar of Companies show. For background, WROGN reported a flat scale in FY23. The firm also generated Rs 21 crore from interest and gain on financial assets which took its overall revenue to Rs 264.8 crore in FY24. Founded in 2014 by brother-sister duo Anjana and Vikram Reddy, WROGN is engaged in the business of trading outdoor products such as apparel, footwear, and accessories among others. Leveraging Kohli’s influence, the brand has rapidly expanded its presence through exclusive brand outlets and strategic partnerships with marketplaces. On the expenses front, cost of materials formed 53.6% of the total expenses. This cost slid 29% and stood at Rs 163.91 crore in FY24. Employee benefits expenses also saw a dip by 7.5% to Rs 32.26 crore during the same period. Significantly, the employee cost also includes ESOP expenses worth Rs 1.96 crore. Commission paid to the selling agents was down by 28% in FY24 at Rs 30.83 crore while other expenses such as advertising promotions and legal & professional fees also shrank significantly. In total, the overall expenditure of the company went down by 24.7% to Rs 305.56 crore during FY24 from Rs 405.6 crore in the previous fiscal year. For the complete expense breakdown, head to TheKredible. WROGN tried to cover up its losses by taking cost-cutting measures but due to the sharp fall in collection, its losses increased by 28.2% to Rs 56.76 crore during the year against Rs 44.26 crore in FY23. Its operating cash outflows, however, improved by over 63% to Rs 5.23 crore during the year. Its outstanding swelled to Rs 636.58 crore as of FY24. As per TheKredible, the firm’s EBITDA margin and ROCE stood at -6.04% and -72.07%, respectively. On a unit level, WROGN spent Rs 1.25 to earn a rupee of operating revenue during FY24. FY23-FY24 FY23 FY24 EBITDA Margin -4.42% -6.04% Expense/₹ of Op Revenue ₹1.18 ₹1.25 ROCE -25.49% -72.07% Aditya Birla’s TMRW recently picked up a 16% stake in WROGN at a $105 million valuation by pouring in Rs 125 crore or $15 million. It’s worth noting that Aditya Birla also acquired a similar brand Bewakoof in December 2022. WROGN has raised around $90 million from the likes of Accel, Flipkart, Kohli, and Sachin Tendulkar since its inception in 2014. In November 2020, Flipkart invested an undisclosed amount in WROGN’s Series F round. The e-commerce major is also an investor in Hrithik Roshan’s HRX which competes with WROGN. According to TheKredible’s D2C report, fashion (apparel, jewelry, footwear, eyewear, and accessories) is the largest category attracting a large set of consumers. India’s fashion industry is booming, with the potential to reach $43.2 billion by 2025. But seeing how anaemic or even negative the numbers have been for most, one can only marvel at the outlier that a Zudio has been over the last two years with its triple-digit growth. Of course, the broader slowdown in the category has been blamed on multiple possible factors, including a craze for investment in the stock markets directly or indirectly. Or perhaps the prioritisation of getting an iPhone over other branded products, considering the rise in iPhone sales in India. Either way, WROGN’s numbers indicate a problem it has acknowledged for some time now, and is making efforts to manage. The challenge it faces is as tough as any pitch Kohli has played on, one suspects.

The D2C revolution: How Indian brands are redefining retail

EntrackrEntrackr · 9m ago
The D2C revolution: How Indian brands are redefining retail
Medial

India’s retail landscape is witnessing a seismic shift, especially post-pandemic, with direct-to-consumer (D2C) brands spearheading the transformation that challenges the traditional business models. By cutting out intermediaries, these brands have established direct connections with consumers, paving the way for a new era of personalized and efficient commerce. The D2C model enables brands to control the entire customer experience, from manufacturing to sales and customer service, which has proven to be a significant advantage in today’s competitive market. According to a recent report by 1Lattice and Sorin Investments, the D2C market in India is projected to reach a size of $61.3 billion by the financial year 2027, growing at a compound annual growth rate (CAGR) of approximately 38%. This report provides an in-depth exploration of the dynamic D2C landscape in India, analyzing unicorns, soonicorns, and notable D2C brands while evaluating the key growth drivers, challenges, and future outlook. [Indian D2C startups raked in $5 Bn in funding since 2021] As per startup intelligence platform TheKredible, Indian D2C startups have attracted over $5 billion in funding across 520 deals since 2021. The number of deals was 132 in 2021, 166 in 2022, 137 in 2023, and 87 in H1 (first half) of 2024. Leading the charge in fundraising, eyewear platform Lenskart, which also operates as a marketplace, accumulated $1.12 billion over the past four years. Meat delivery startup Licious tagged along with $587.1 million. E-commerce roll-up brand The Good Glamm Group followed with $221 million, consumer electronic company boAt with $166.7 million, and health supplements platform HealthKart with $135 million. Manufacturer of makeup products SUGAR Cosmetics, meat delivery firm FreshToHome, beauty brand MamaEarth, beverages company Bira 91, and producer of dosa-batter ID Fresh Food also managed to grab larger cheques during the years. [Top revenue generating D2C brands in FY23] In the fiscal year 2023, as many as 177 D2C brands collectively generated Rs 34,360 crore (approximately $4 billion) in revenue. Lenskart emerged as the leader, with a revenue of Rs 3,788 crore. Aman Gupta-led boAt, jewelry brand Caratlane, IPO-bound Kushal’s, and consumer electronic firm Noise followed with operating revenue of Rs 3,376 crore, Rs 2,168 crore, Rs 1,909 crore, and Rs 1,423.13 crore respectively. For the complete report, visit here. [Top profit/loss-making D2C brands in FY23] Despite the overall positive financial performance, profitability remains a challenge for many D2C brands. Only 24 of the 170+ companies considered in this report were profitable as of FY23, with Kushal’s leading the pack with Rs 157.28 crore in profits. Kushal’s is followed by Caratlane, Oziva, Rare Rabbit, Technosport, Urban Ladder, Zappfresh, Lahori, Minimalist, and Boult. On the other hand, The Good Glamm Group reported the highest losses, amounting to Rs 916.8 crore. Licious, Bira91, FreshToHome, Curefoods, Purplle, Wow Skin Science, Pepperfry, Wingreens Farms, and Bluestone are next on the list. [D2C brands with best and worst burn rate] As per the data sourced from TheKredible, beauty brand WishCare had the most healthy burn rate (Rs 0.77) in FY23 followed by sports apparel maker TechnoSport and apparel brand Rare Rabbit with Rs 0.86 and Rs 0.90 while Urban Ladder, The Divine Foods, and Kushal’s are next in the list, each having a burn rate of Rs 0.91. Pet-care startup Wagr, meat delivery firm FreshToHome, fashion startup Newme, Deepika Padukone’s 82°E, and luggage brand Uppercase are among the D2C brands having the worst burn rates at Rs 5.83, Rs 4.88, Rs 4.20, Rs 3.18, and Rs 3.08. Download the complete report at TheKredible. It’s worth highlighting that TheKredible has calculated these burn rates by dividing the total expenses of brands by their respective operating revenue. [Fashion, F&B, and Personal Care Brands Lead among D2C Categories] D2C brands span a diverse range of categories, including Food & Beverages, Personal Care, Apparel, Health & Wellness, Pet Care, Consumer electronics, Home & Kitchen, Jewellery, Furniture, Footwear, Eyewear, Travel Accessories, Decor, and Accessories. Among the 177 companies considered in the report, 48 belong to the Food & Beverages, contributing 18% to the total revenue generated by all the companies collectively. Personal Care brands (38) are next, forming 20% followed by 25 Apparel (27.72%), 21 Health & Wellness (6.7%), and 7 Pet Care (4.37%) brands. Among the D2C brands fashion (Apparel, Jewellery, Footwear, Eyewear, and Accessories), Food & Beverages, and Personal Care are the three largest categories attracting a large set of consumers. In contrast to more established D2C players like Mamaearth, Sugar Cosmetics, and boAt, newer entrants in fashion, footwear, and food delivery are aggressively adopting a hybrid business model. Unlike their predecessors, these new D2C brands are rapidly expanding into physical stores. Companies like Snitch, Mokobara, and Pilgrim are prioritizing an omnichannel approach, opening brick-and-mortar outlets soon after securing initial funding. [Conslusion] The D2C landscape in India is rapidly evolving, driven by factors such as increased internet penetration, rising disposable incomes, and a growing demand for personalized products. Since the onset of the COVID-19 pandemic, D2C brands have gained significant traction, challenging traditional retail models and reshaping consumer behavior. These brands are capitalizing on a data-driven approach to expand their physical presence, contributing to a significant shift in the retail ecosystem. The sector’s growth has been fueled by substantial investments underlining the growing investor confidence in the D2C model. As the market expands, D2C brands are also playing a crucial role in job creation, technology adoption, and supply chain innovation. However, they face challenges from intense competition and shifting consumer preferences, making innovation and customer retention essential for long-term success. Government initiatives, such as the Digital India push, the expansion of internet connectivity, and support for local businesses, are creating a conducive environment for D2C brands to thrive. As the e-commerce ecosystem matures, these brands are well-positioned to capture a significant market share.

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