Mamaearth Pursues $150M Pre-IPO Funding from Fidelity, GIC, QIA, SoftBank
Mamaearth, operated by Honasa Consumer Private Limited, has engaged in initial discussions with potential investors, including SoftBank
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Although founders Varun and Ghazal Alagh are confident about delivering returns to their investors through their upcoming public listing, there is interest from some early investors in selling their shares before the IPO, as reported by a source.
Mamaearth, operated by Honasa Consumer Private Limited, has engaged in initial discussions with potential investors, including SoftBank, sovereign wealth funds such as Singapore's GIC and Qatar Investment Authority (QIA), as well as pre-IPO investors like Fidelity Investments, according to sources familiar with the matter. These discussions aim to raise funds at a valuation of $1.5 billion. It is worth noting that this funding round will primarily involve a secondary share sale, given that Mamaearth, a profitable company, currently does not require a primary capital injection, as stated by one of the sources mentioned earlier.
Early investors in Mamaearth include Stellaris Venture Partners, Fireside Ventures, Shilpa Shetty Kundra, former BharatPe executive Suhail Sameer, and Snapdeal's Kunal Bahl and Rohit Bansal, according to data from Tracxn, a private markets data provider. However, it is important to emphasize that these discussions are still in their preliminary stages.
One source stated, "SoftBank has primarily been interested in follow-on rounds. Mamaearth is already profitable, and with the broader markets showing promise, its IPO is expected to proceed smoothly, making it an attractive prospect for SoftBank."
The successful conclusion of Mamaearth's funding round would be a significant boost for this direct-to-consumer (D2C) startup, which is on the path to an IPO. Mamaearth has the potential to become the first venture capital-funded unicorn to be listed on India's stock exchanges this year. Last year, Five Star Business Finance, backed by Peak XV Partners, became the last venture capital-backed unicorn to go public.
Earlier this month, Mamaearth received approval from the Securities and Exchange Board of India (Sebi), clearing the way for its IPO. Sources indicate that the company is gearing up to initiate investor roadshows for its IPO in the coming weeks.
Mamaearth had submitted draft papers to Sebi in December of the previous year, encompassing a fresh issuance of shares valued at Rs 400 crore and an offer for sale (OFS) of Rs 4.68 crore shares by promoters and investors.
Shareholders who will reduce their holdings through the IPO include founders Varun and Ghazal Alagh, Sofina Ventures SA, Evolvence, Fireside Ventures, Stellaris Venture Partners, Snapdeal founder Kunal Bahl, Bollywood actress Shilpa Shetty Kundra, Rishabh Harsh Mariwala, and Rohit Kumar Bansal. As previously reported, Peak XV Partners is unlikely to participate in the OFS.
Founded in 2016 by the husband-wife duo Varun and Ghazal Alagh, who gained fame on 'Shark Tank,' Mamaearth achieved unicorn status (a startup valued at over $1 billion) in 2021 when it raised $52 million in a funding round led by Peak XV Partners. In the fiscal year 2022, the company reported a net profit of approximately Rs 20 crore, and its revenues also saw a remarkable surge of 102 percent, reaching Rs 952 crore compared to the previous year.
