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Exclusive: Sofina-led funding may value Mamaearth at $700 million

The Belgian investment fund is at an advanced stage of discussions and negotiations to lead a new funding series in personal care brand Mamaearth as per the people who know the details. 

The fresh infusion of funds will value the direct-to-consumer (D2C) brand at about $700 million from around $200 million in 2020. It indicates the continued investor interest in D2C brands overall. D2C brands have gained amid the Covid-19 pandemic as shoppers 

raising purchases online. The financing series is expected to be in the range of $60 to $80 million, having a component of around $50 million. 

Sofina is believed to have already chosen a stake in Mamaearth via a secondary share sale. The process where the money doesn’t flow into the company directly. It goes to investors selling their stakes. 

One of the spokespeople said- “There has been a recent secondary sale including from their (Mamaearth) staff as well as from Sofina which has picked up a stake. Sofina is now leading the round which will be finalized by this month”. 

Not only this, but private equity firm Kedaara Capital had also held talks with the company, but it wasn’t made clear if it would participate in the funding round or not. 

Both investing bodies Sofina and Kedaara didn’t respond to any of the media’s messages till Wednesday. Also, the co-founder of Mamaearth Varun Alagh declined to comment. 

The company was founded in 2016 and its current revenue run rate is around $100 million, which is approx INR 700 crore. The Mumbai-based investment Bank Avendus Capital said in a report in 2020 that D2C brands could become a $100 billion market by 2025.

The report suggests that the growth in D2C brands has been attributed to multiple factors involving more prospect awareness and willingness to try out new brands. Even at a premium price point with the growth in online shoppers.

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