Vineeta Singh and Kaushik Mukherjee-led SUGAR Cosmetics has raised Rs 144.5 crore from existing investor A91 Partners, even as the beauty and personal care company faces a sharp decline in valuation amid weaker revenue and widening losses.
According to regulatory filings, SUGAR’s board approved the allotment of 112,248 compulsorily convertible preference shares (CCPS) to A91 Emerging Fund III at an issue price of Rs 12,871 per share. The transaction was approved on September 1.
The latest capital infusion comes at a substantially lower valuation compared with the levels at which SUGAR raised money in previous rounds. The company’s post-money valuation is estimated to be in the range of Rs 550-600 crore, according to calculations reported by Inc42. This represents a decline of around 75-80% from the Rs 2,600-2,700 crore valuation at which the company raised capital in November 2024.
SUGAR’s valuation had previously peaked at around Rs 3,000 crore in 2022, when the company raised $50 million in a Series D round led by L Catterton. The latest round therefore marks a significant reset in investor expectations around the D2C beauty brand.
SUGAR’s financial performance comes under pressure
The latest fundraise comes as SUGAR continues to deal with pressure on both revenue and profitability.
The company’s operating revenue fell around 20% year-on-year to Rs 404.4 crore in FY25, compared with Rs 505.1 crore in FY24. During the same period, its net loss nearly doubled to Rs 135 crore, from Rs 68.4 crore a year earlier.
Its EBITDA loss also more than doubled during the year, increasing to Rs 116 crore in FY25 from Rs 48.5 crore in FY24. The company has not yet reported its financial results for FY26.
A valuation report attached to the company’s regulatory filings reportedly pointed to a sustained deterioration in its financial performance over the previous two financial years.
The company’s financial pressure has also been linked to its aggressive expansion into offline retail. According to an Economic Times report, SUGAR had to shut 30-40% of the physical stores it opened after the outlets struggled with losses at the individual-store level.
A91 Partners continues to back SUGAR
Despite the sharp valuation correction, A91 Partners has continued to invest in SUGAR, with the latest round coming from its existing investment vehicle, A91 Emerging Fund III.
The latest investment provides SUGAR with fresh equity capital at a time when the company is working through weaker operating performance and the challenges associated with its offline expansion strategy.
The funding also highlights the changing dynamics of India’s direct-to-consumer beauty market, where companies that previously attracted high valuations during the rapid D2C funding cycle are now being assessed more closely on revenue growth, profitability and store-level economics.
SUGAR’s funding journey
Founded in 2015 by Vineeta Singh and Kaushik Mukherjee, Mumbai-based SUGAR Cosmetics began as an online-focused beauty brand and subsequently expanded across physical retail, its own digital platform and third-party ecommerce marketplaces.
The company has raised around $90 million in funding to date, with investors including A91 Partners, Elevation Capital, Anicut Capital and IndiaQuotient.
In November 2024, SUGAR raised around Rs 38 crore from existing investors, including Anicut Equity Continuum Fund, Elevation Capital, Malabar Investment and L Catterton. At the time, the company’s valuation was estimated at around Rs 2,600-2,700 crore.
The company’s earlier Series D round in May 2022, led by L Catterton, had brought in $50 million and valued SUGAR at roughly Rs 3,000 crore.
From D2C growth story to a valuation reset
SUGAR emerged as one of India’s prominent homegrown D2C beauty brands, particularly among younger consumers. The company sells makeup and personal care products through its website, physical retail outlets and e-commerce platforms.
It currently operates four brands — SUGAR, POP, ENN and Quench Botanics — and competes in a market that includes established companies such as Nykaa and Mamaearth as well as newer beauty brands.
The company’s latest funding round comes against a broader recalibration in India’s D2C ecosystem. While beauty and personal care remain among the most actively funded consumer categories, investors have increasingly shifted their focus towards sustainable growth, margins and unit economics.
For SUGAR, the immediate priority will be to use the fresh capital to stabilise its business, improve operating performance and rebuild growth. The latest investment from A91 also signals continued investor support, despite the steep reduction in valuation from its earlier peak.
The fundraise, however, marks a significant change from SUGAR’s earlier growth phase. With its valuation now substantially below previous levels and losses continuing to weigh on the business, the company will need to demonstrate stronger financial performance and healthier economics to regain the investor confidence and valuation it commanded during the peak of India’s D2C funding boom.
