The fresh equity round values the beauty startup at Rs 550-600 crore, significantly below its previous valuation of Rs 2,600-2,700 crore in November 2024
D2C beauty brand Sugar Cosmetics has raised Rs 144.47 crore in a fresh equity round from venture capital firm A91 Partners at a sharply lower valuation, according to Ministry of Corporate Affairs filings accessed by media reports. The Mumbai-based company allotted 1.12 lakh Series D7 compulsorily convertible preference shares to A91 Emerging Fund III at Rs 12,871 per share.
The company’s board approved the transaction on 1 September, with the preference shares set to convert into equity upon a listing or one day before the completion of 20 years from the issue date, whichever is earlier. The latest fundraise comes as Sugar faces continued pressure on revenue and profitability following a period of aggressive expansion.
The latest round values Sugar Cosmetics at a post-money valuation of Rs 550-600 crore, representing a 75-80 per cent decline from the Rs 2,600-2,700 crore valuation it commanded during its November 2024 fundraise. The company’s pre-money valuation in the latest round stood at Rs 433.6 crore, while its peak valuation was around Rs 3,000 crore in 2022.
The valuation comes against a backdrop of deteriorating financial performance. Sugar Cosmetics’ net loss nearly doubled to Rs 135 crore in FY25 from Rs 68.4 crore in the previous financial year, while operating revenue declined 20 per cent to Rs 404.4 crore from Rs 505.1 crore. The company’s Ebitda loss also more than doubled to Rs 116 crore in FY25 from Rs 48.5 crore a year earlier.
Sugar has not yet reported its financial results for FY26.
“The company has demonstrated a sustained and worsening pattern of financial deterioration over the past two financial years,” said registered valuer Sayali Deshkar in a 30 June 2026 valuation report attached to the filings.
Offline Expansion Under Pressure
Media reports have linked the company’s financial strain to its aggressive expansion into physical retail. An Economic Times report said Sugar Cosmetics had shut 30-40 per cent of newly opened stores due to losses at the individual store level. The company was founded in 2015 by Vineeta Singh and Kaushik Mukherjee and sells beauty and personal care products through its website, physical stores and ecommerce platforms. It operates four brands which are Sugar, POP, ENN and Quench Botanics.
Sugar Cosmetics has raised around USD 90 million to date from investors including Elevation Capital, A91 Partners, Anicut Capital and IndiaQuotient. The company competes with players such as Nykaa, Mamaearth and Renee Cosmetics in India’s expanding D2C beauty and personal care market.
The latest fundraise comes at a time when India’s D2C sector is entering what industry observers describe as a ‘3.0’ phase, with beauty and personal care attracting more than USD 1.1 billion across 201 deals between 2015 and Q1 FY26. The sharp reduction in Sugar’s valuation, however, highlights the growing emphasis on profitability and sustainable growth in the segment.
