Sugar Cosmetics set to raise ₹150 crore as losses widen

The beauty brand has been grappling with a severe cash crunch over the past six months

- Priyamvada C.

Sugar Cosmetics has nearly halved its offline footprint, shutting stores and dropping costly distributors to improve profitability.

(PRASHANT NAKWE/MINT)

Sugar Cosmetics, once among India’s fastest-growing beauty startups, is seeking a sharply discounted funding round after an aggressive offline expansion and slowing sales growth strained its finances, according to four people familiar with the matter.

The Mumbai-based beauty brand has begun a process to raise ₹100-150 crore after grappling with a severe cash crunch over the past six months amid declining revenue, a shrinking offline footprint and rising employee attrition, the people said.

The fresh fundraise is likely to happen at a valuation of ₹1,400-1,500 crore, sharply lower than its peak valuation of about ₹3,000 crore in 2022, two of the people said. While typical growth investors are unlikely to invest in the current state, the company will tap family offices and high net-worth individuals (HNIs) alongside some existing investors to facilitate the capital raise even as its revenue declined further to about ₹380 crore in FY26, the person added.