Sugar Cosmetics has raised Rs 144.5 crore from existing investor A91 Partners, giving the beauty brand fresh capital at a time when its revenue and profitability remain under pressure.
This deal also represents a major shake-up in the way the firm is being valued. According to the most recent equity issuance, the value of Sugar Cosmetics is said to be around Rs 755 crore, which is 75% lower than its highest valuation of Rs 3,000 crore.
A91 Partners subscribed to the entire new issue and now holds 19.97% of the company.
A91 Partners subscribes to entire fresh issue
Sugar approved the allotment of 1,12,248 Series Compulsorily Convertible Preference Shares, or CCPS, at Rs 12,871 apiece to A91 Partners.
The investment totals about Rs 144.5 crore, making A91 the sole investor in the fresh issuance.
The share allotment and resulting ownership structure imply a post-money valuation of approximately Rs 755 crore. That represents a sharp change from the levels at which Sugar attracted capital during the peak of the direct-to-consumer funding cycle.
The latest financing is particularly notable because A91 is putting more money into the company even as some other shareholders are looking for liquidity.
Early investors explore secondary exits
Alongside the primary capital raise, some existing investors are seeking buyers for their stakes in Sugar Cosmetics.
Secondary transactions involving stakes worth as much as Rs 150 crore are being explored, with some early shareholders approaching potential buyers at substantial discounts to the company’s earlier valuation.
A consulting firm has also been pitching Sugar shares at a fraction of the brand’s peak valuation, with a minimum transaction size of around Rs 25 crore.
These secondary discussions are separate from the Rs 144.5 crore being invested directly into Sugar by A91 Partners.
The distinction matters. The primary round brings fresh money into the company, while a secondary sale would allow existing shareholders to sell some or all of their holdings to new buyers.
A very different valuation from Sugar’s 2022 round
Sugar Cosmetics was valued at around $400 million, or roughly Rs 3,000 crore, in 2022, when it raised $50 million in a funding round led by L Catterton.
At the time, the company was expanding its offline retail presence and had established itself as a prominent youth-focused cosmetics brand.
The latest valuation of around Rs 755 crore puts that earlier benchmark into perspective. Sugar is now being valued at approximately one-fourth of its 2022 peak.
The change comes after a difficult financial year for the company.
Revenue falls while losses widen
Sugar Cosmetics’ revenue declined 20% to Rs 404 crore in FY25.
Its net loss, meanwhile, almost doubled to Rs 135 crore, compared with Rs 68 crore previously.
That combination of weaker revenue and wider losses provides important context for the lower valuation attached to the new funding round.
Sugar’s online-first journey expanded into physical retail
Founded by Vineeta Singh and Kaushik Mukherjee, Sugar began as an online-first beauty brand before building a sizeable offline presence.
The company sells makeup and personal care products across online marketplaces, its own platform and a network of physical retail outlets.
That distribution footprint gives Sugar a presence beyond the pure-play D2C model it started with, but the latest funding and valuation reset show how dramatically investor expectations have changed since the company’s earlier fundraising cycle.
For A91 Partners, the Rs 144.5 crore investment represents another commitment to the business at a substantially lower valuation than Sugar commanded four years ago.
For shareholders seeking exits, meanwhile, the focus appears to have shifted towards securing liquidity even if that means accepting prices well below the company’s former peak.
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