Singapore’s GIC may pay $75 million for Wow Skin Science stake

Mumbai: Singapore’s sovereign wealth fund GIC, is in talks to pick up a significant minority stake in direct-to-consumer (D2C) beauty and personal care brand Wow Skin Science for $75 million, four people with direct knowledge of the deal said.

The deal would give the ChrysCapital-backed company a post-money valuation of $400–$420 million.

The company’s existing investors will also top-up capital to maintain stakes, said one of the people.

Last year, ChrysCapital had acquired about 35% stake in Wow for $50 million, valuing it at Rs 900 crore.

“The company will look to expand its offline presence and will also push its online efforts by investing in technology,” another source said.

It has also evaluated some smaller acquisition targets to fill product and distribution gaps, the source added.

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Wow Skin Science and GIC did not respond to ET’s emailed queries.

Founded in 2014 by brothers Manish and Karan Chowdhary, Wow Skin Science sells toxin-free beauty products made with natural ingredients across categories such as skin, hair, nutritional supplements, bath and body, and wellness. It sells on e-commerce platforms, its own website, as well as brick-and-mortar stores.

The company’s operating revenue grew to Rs 100 crore in the financial year ending March 31, 2021, from Rs 6.5 crore in FY20, filings with the Ministry of Corporate Affairs showed.

It recorded a loss in FY21 of Rs 8.8 crore compared to a profit of Rs 9 lakh in FY20.

Wow competes with clean beauty and natural beauty D2C brands such as Plum, EarthRhythm, Juicy Chemistry, Organic Harvest, mCaffeine, Beardo, Mamaearth and Bombay Shaving Company.

It also sells globally and has a presence in markets such as the United States, Middle East, and European Union.

D2C beauty and personal care companies are gaining traction among investors even amid fears of an impending slowdown in deal making. Companies such as Plum, Purplle, Sugar Cosmetics and Mamaearth have either recently raised money or are in the process of finalizing a new round, sources said.

According to a latest report by Statista, the revenue in India’s beauty and personal care market amounts to $26.07 billion in FY22. The market is expected to show 4.64% Compounded Annual Growth Rate between 2022 and 2026. “In the beauty and personal care market, 10.7% of total revenue will be generated through online sales by 2022,” the report said.

GIC, one of the largest and oldest global investors in India, has been slim up its presence in early-stage companies in India. It has invested in new-age companies such as Locus, Razorpay, and Swiggy, among others.

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