Nykaa to Strengthen Beauty Portfolio with Major Stakes in Dot & Key and Earth Rhythm

FSN E-Commerce Ventures Limited, the parent company of Nykaa, recently announced a strategic increase in its stake in Dot & Key, enhancing its existing majority share from 51% to 90%.

This acquisition involves a substantial investment of ₹265 crore, reflecting Nykaa’s confidence in the long-term potential and performance of Dot & Key, a prominent skincare brand. This move underscores Nykaa’s strategy to strengthen its portfolio of owned brands, which has been instrumental in its growth trajectory.

Dot & Key, known for its fruit-forward skincare products, emphasises the importance of clinically tested and safe formulations. With over 75 unique products that blend natural ingredients with scientific innovation, the brand has successfully catered to over 5 million Indian customers.

Since Nykaa’s initial investment in 2021, Dot & Key has experienced remarkable growth, achieving profitability by early 2023. With an impressive annualised Gross Merchandise Value (GMV) run rate of over ₹750 crore as of Q1 FY25, Dot & Key stands as one of the most successful Indian beauty brands of the last decade. Its performance has consistently outpaced industry growth and its rankings on various marketplace platforms highlight its rapid ascent in the beauty sector.

In addition to the increased stake in Dot & Key, Nykaa also announced its acquisition of a majority stake in Earth Rhythm, a leading homegrown clean beauty brand. Founded in 2019, Earth Rhythm has quickly become a significant player in the beauty industry, known for its commitment to transparency, efficacy, and sustainability. Nykaa had previously acquired a minority stake in Earth Rhythm in 2022. With this new investment, Earth Rhythm will become a subsidiary of FSN E-Commerce Ventures Limited.

Earth Rhythm’s growth has been driven by its dedication to developing clean and clinically effective beauty and personal care products that are safe for both people and the planet. The brand’s commitment to responsible resource use and plastic-neutral practices has resonated with consumers, leading to strong sales growth, customer acquisition, and brand awareness. With over 250 SKUs across six categories, Earth Rhythm has built a robust product portfolio. The brand’s in-house R&D and manufacturing capabilities enable it to maintain high standards of quality control, drive innovation, and meet evolving customer needs.

These strategic investments by Nykaa highlight the company’s focus on expanding its presence in the beauty and personal care industry through targeted acquisitions. The company’s recent financial performance also reflects this growth strategy. For Q1 FY25, Nykaa reported a 23% year-on-year increase in Revenue from Operations, reaching ₹17,461 million. Net Profit for the period surged by 150% year-on-year to ₹136 million, further solidifying Nykaa’s position as a leader in the Indian beauty and e-commerce sectors.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.