South Asian Beauty Startups Are Grabbing Venture Capital Dollars

  • Several new startups are taking inspiration from South Asian beauty traditions.
  • Some brands focus on “inclusive” beauty, which VCs say is a fast-growing industry.
  • Others focus on skin care and wellness, areas that have seen a surge in investment during the pandemic.

From saffron face serums for firming and brightening to saffron teas for hair growth, a growing number of beauty startups are taking inspiration from the Indian subcontinent.

Some are bringing the principles of Ayurveda – an ancient system of traditional holistic medicine in India – to Western consumers.

These startups are advertising themselves as wellness brands and introducing American customers to beauty rituals that South Asian women have practiced for centuries. Others are launching cosmetic lines that address concerns common to women with darker skin tones that have long been overlooked by top beauty brands.

The inclusive beauty space is a fast-growing sector, according to Daphne Che, director of Montage Ventures. Her company is the lead investor in Live Tinted, a South Asian-founded cosmetics brand that raised $3 million in funding in 2021. Other investors in the brand include Halogen Capital and Curate Capital.

Aavrani, a pioneer in luxury Ayurvedic skin care launched in 2018, has raised nearly $10 million in two rounds from companies including Amplifyher and The MBA Fund, according to Crunchbase.

In the past year, venture capital investment in beauty and wellness companies has increased significantly. Between 2016 and 2020, the average amount of funding raised by individual companies in this space was around $1 million. By 2021, that number had risen to $3.2 million, according to Crunchbase.

Some of the biggest beauty news of the past year came from companies based in India. MyGlamm, a Mumbai-based direct-to-consumer beauty startup, has risen to unicorn status with a valuation of $1.2 billion.

Nykaa, a fashion and beauty e-commerce company, made nearly $13 billion on its debut on the Indian National Stock Exchange and launched its founder, Falguni Nayar, to the status of India’s richest billionaire.

Many emerging beauty startups operate as direct-to-consumer businesses, or DTCs, meaning they sell their products directly to consumers without the help of intermediary retailers. The recent increase in investment in these companies can be attributed to the wider success of DTC’s leading companies such as Dollar Shave Club, Warby Parker and Casper. Not that all successful DTC brands are completely foolproof. Glossier, the “cool-girl” beauty brand that catapulted to massive success in 2019, laid off 80 employees in January.

Still, several Ayurvedic hair and skin care startups have sprung up after Aavrani’s success, such as Soma Ayurvedic, Fable & Mane, and Prakti Beauty, founded by model Pritika Swarup.

fashion business predicts that by 2026 the global Ayurvedic products market will triple in growth from 2017 and reach a total of $14.9 billion in value. Established beauty houses have also joined the trend. Estée Lauder recently invested in the New Delhi-based luxury skincare brand Forest Essentials.

Deepica Mutyala, founder of Live Tinted, often weaves her own experiences as a girl of South Asian descent growing up in Texas into the company’s campaigns. She said she would dye her hair blonde to meet Western beauty standards, but she still faces prejudice against darker skin within the Native American community.

Mutyala found himself at odds with Indian and Western ideals of beauty. Their signature product, the Huestick, was born out of that struggle. Che calls Mutyala “an outsider to the industry but an insider to the problem” and said it was one of the many reasons his company was compelled by Mutyala’s vision.

Priyanka Ganjoo, a Harvard Business School graduate, launched Kulfi Beauty in 2020 with similar personal impetus. Ganjoo, like many women of South Asian descent, has dark circles under her eyes, so she wore colorful makeup to distract them. Her line of vibrant eyeliners is based on this childhood practice. Ganjoo says she would consider venture capital funding if she found the right partner, but they would have to be someone who aligns with Kulfi’s goal of building an inclusive global brand.

“Before starting Kulfi, I found brands that symbolized and appropriated South Asian culture,” Ganjoo said.

“Finally, I decided it was time for a founder from South Asia to reclaim our narrative and represent our community through our products, our storytelling and our actions.”

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