SUGAR Cosmetics closed a ₹145 Cr funding round from A91 Partners, taking an 80% valuation hit. The deal slashes its previous valuation of ₹2,700 Cr from late 2024 by nearly 80%. This marks a stark reality check on aggressive offline expansion for D2C brands.
How We Got Here
The D2C beauty brand had peaked at a ₹3,000 Cr valuation in 2022 before its last funding in November 2024 valued it at ₹2,600-2,700 Cr. However, FY25 saw its operating revenue drop by 20% to ₹404.4 Cr, while net losses almost doubled to ₹135 Cr.
The Numbers
- The investment was via 1.12 Lakh Series D7 CCPS allotted to A91 Emerging Fund III at ₹12,871 per share.
- EBITDA losses more than doubled to ₹116 Cr in FY25 from ₹48.5 Cr in FY24.
- A valuation report dated June 30, 2026, cited a "sustained and worsening pattern of financial deterioration."
- SUGAR shut down 30-40% of its physical stores due to losses incurred from aggressive offline expansion.
- The company, founded in 2015 by Vineeta Singh and Kaushik Mukherjee, has raised $90 Mn to date.
What Happens Next
🇮🇳 Why This Matters for India
This serves as a sharp warning for growth-at-all-costs D2C founders in Bangalore and Gurugram planning extensive offline pushes without clear unit economics.
The Take
This valuation haircut fundamentally redefines the D2C playbook: sustainable unit economics now trump aggressive expansion for investors. Founders still chasing offline footprint solely for vanity metrics will find Series B and C rounds significantly tougher to close.
Source:
Inc42 ↗