Indian direct-to-consumer clean beauty brand Earth Rhythm raised an $8 million Series A led by beauty retailer Nykaa.

WHO: Earth Rhythm, formerly Soapworks India, was launched in 2015 by erstwhile banker and cosmetic chemist Harini Sivakumar. The clean beauty start-up has been a pure direct-to-consumer brand but recently begun focusing on having an offline presence. The brand is also distributed in markets such as US, Germany, Bhutan, and Nepal.

Nykaa founder and CEO Falguni Nayar, a former managing director at Kotak Investment Banking, founded Nykaa as an e-commerce platform for beauty and wellness products in 2012. The Mumbai-headquartered company launched offline operations in 2015 and currently has more than 2,500 brands, including 13 owned brands and over 70 offline stores across three formats—Nykaa Luxe, Nykaa On Trend, and Nykaa Beauty Kiosks. Nykaa has grown to be India's biggest online marketplace for beauty, personal care, and fashion brands.

WHY: Nykaa said the investment will further strengthen its product portfolio and will move it into the sustainable beauty segment while improving its positioning in a growing market for products that are committed to efficacy as well as the planet.

IN THEIR OWN WORDS: "We are thrilled to have Nykaa as an investor in Earth Rhythm. Their investment is a clear endorsement of our efforts to build clinically effective and technology-driven skincare and haircare brand. Through this investment, our commitment to our customers and the planet is only going to get stronger," said Harini Sivakumar, Chief Executive Officer and founder of Earth Rhythm.

Speaking about the acquisition, Anchit Nayar, CEO, Beauty E-Commerce, Nykaa, said, "For Nykaa, brands that originate within the ethos of transparency and constant innovation towards efficacy and sustainability hold great value. Harini's tenacious story of why she founded Earth Rhythm reflects her focus on creating a wide range of beauty products that the discerning Indian consumer is looking for. We are proud to partner with a promising early-stage start-up and help them to achieve their potential by leveraging Nykaa's expertise and ecosystem."

DETAILS:

• Earth Rhythm raised $8 million in a Series A round led by beauty retailer Nykaa. Existing investor Anicut Capital also participated in this round.
• Nykaa acquired an 18.51% stake in Earth Rhythm for Rs 41.65 crore.
• According to the BSE filing, Nykaa is entering into a share subscription agreement, share purchase agreement, and shareholders' agreement by the company to acquire by way of subscription and/or purchase of compulsory convertible cumulative preference shares and/or equity shares, up to 18.51% of the fully diluted share capital of Earth Rhythm Private Limited.
• In July 2021, Earth Rhythm raised $1.2 million in a seed funding round from Anicut Angel Fund.
• Nykaa acquired a majority stake of Dot & Key Wellness Private Ltd (Dot & Key) through the subscription and purchase of equity shares in early 2022. 
• Nykaa's IPO in November 2021 raised 53.5 billion rupees ($722 million) through the sale.