Sequoia Capital-backed Indian skincare startup Mamaearth is in talks to raise at least $300 million in a planned IPO next year and is seeking a valuation of around $3 billion, three people with direct knowledge of the company’s plans told Reuters.
Founded in 2016, Mamaearth has become popular in India with its range of “toxin-free” products such as face washes, shampoos, and hair oils.
It competes with Unilever’s India unit, Hindustan Unilever, and Procter & Gamble Co in the booming personal care industry.
The company was last valued at $1.2 billion in January this year when it raised fresh funds from investors including Sequoia and Belgium’s Sofina.
Mamaearth is targetting a valuation of around $3 billion – 10-12 times forward revenue, a person briefed on the discussions said. It plans to file draft regulatory papers by the end of this year, said sources, who declined to be named as the plan is private.
Two of those sources said Mamaearth is in early-stage discussions to raise at least $300 million in its IPO, with a third source pegging the number at $350 million.
A Mamaearth spokesperson declined to comment on its IPO plans. The company’s target valuation for the IPO, and the funds it plans to raise, have not been previously reported.
One equity research analyst, however, said the success of Mamaearth’s IPO could hinge on how it plans to rapidly expand into offline sales.
Most Indians still go to retail outlets to shop, with e-commerce accounting for just 5-6% of spending.
CEO Alagh told the Business Standard newspaper in January that 70% of Mamaearth’s sales come from online platforms, but it was targetting a bigger offline presence and aiming to reach 40,000 retail outlets in 100 cities this year.
