Vineeta Singh might have become a household name after being a judge on Shark Tank, but her own business isn’t doing all that well.
Mumbai-based beauty brand Sugar Cosmetics is reportedly raising fresh capital at a valuation that’s a fraction of what it once commanded, in a down round that highlights the tougher times that have befallen several of India’s once high-flying D2C darlings.
According to a report in the Economic Times, Sugar is raising Rs 140-150 crore from existing investor A91 Partners, in a deal that could value the company at just Rs 500-600 crore. That’s a fall of more than 80% from its peak valuation of around Rs 3,000 crore, which it had touched four years ago when it last raised a big round of capital.
From D2C Disruptor To Cult Beauty Brand
Sugar Cosmetics was founded in 2015 by husband-wife duo Vineeta Singh and Kaushik Mukherjee, both IIM Ahmedabad alumni. Vineeta, an IIT Madras graduate, had turned down a lucrative investment banking offer from Deutsche Bank to bet on entrepreneurship — this was actually her third startup attempt, after an HR services venture and a beauty subscription business called Fab Bag, both of which gave her a close look at the gaps in India’s beauty market.
The idea behind Sugar was straightforward but underserved at the time: most beauty brands sold in India were formulated for lighter, non-Indian skin tones and didn’t hold up well in Indian heat and humidity. Sugar built its range of lipsticks, foundations, and other makeup products specifically around these needs, selling online first before making a big push into offline retail from 2017 onwards.
That omnichannel bet paid off. The brand’s low-poly packaging and clutter-breaking marketing made it a favourite with Gen Z and millennial shoppers, and it scaled its physical footprint aggressively — from a few thousand retail touchpoints in 2020 to over 45,000 across 500+ cities in the years since, alongside a presence on Amazon, Nykaa, Myntra, and its own app.
A Steep Climb In Funding
Sugar’s valuation climbed sharply through its early years and then through its bigger institutional rounds. The company was valued at around Rs 300 crore in January 2019, and this had more than doubled to Rs 730 crore by February 2021, when it raised its Series C round led by Elevation Capital, with participation from A91 Partners and India Quotient. The big jump came in May 2022, when Sugar closed a $50 million Series D round led by L Catterton’s Asia fund, the private equity firm backed by luxury conglomerate LVMH, with existing backers A91 Partners, Elevation Capital, and India Quotient also participating. That round pushed Sugar’s valuation to around Rs 3,000 crore, its peak to date, and came with some star power too, as the brand roped in Bollywood actor Ranveer Singh as an investor and brand ambassador, alongside campaigns featuring Tamannaah Bhatia. Over the years, Sugar’s cap table has also included Anicut Capital, Stride Ventures, Malabar Investments, RB Investments, and Verlinvest.
By November 2024, when Sugar raised a smaller top-up round from existing investors to help fund its Korean skincare brand Quench Botanics, its valuation had already eased slightly to around Rs 2,900 crore. That modest dip has now turned into a much steeper slide, with the fresh round from A91 Partners reportedly valuing Sugar at just Rs 500-600 crore, wiping out more than 80% of its 2022 peak in under two years.
What The Financials Show
Sugar’s revenue growth held up well for a while even as questions about its valuation began to surface. Operating revenue grew from Rs 128 crore in FY21 to Rs 222 crore in FY22, then jumped to Rs 420 crore in FY23 and Rs 505 crore in FY24, tracking the company’s aggressive retail expansion during this period. That growth streak broke in FY25, when revenue actually dipped slightly to Rs 404 crore, and early estimates for FY26 put the figure at around Rs 300-350 crore, pointing to a further slowdown rather than a recovery. Losses have been a persistent drag through nearly this entire stretch. Sugar’s net loss stood at Rs 21 crore in FY21, before widening sharply to Rs 76 crore in both FY22 and FY23. It narrowed a little to Rs 68 crore in FY24, only to balloon to Rs 134 crore in FY25, its steepest loss on record, arriving in the same year that revenue began to shrink.
The Fall
This combination of slowing revenue and mounting losses appears to be central to the valuation cut. Reports suggest the fundraise comes as Sugar grapples with a cash crunch following a period of aggressive, capital-intensive offline expansion, alongside broader pressure on margins in India’s crowded beauty and personal care space, a sector that now includes deep-pocketed rivals, private-label entrants from quick-commerce platforms, and international brands expanding their India presence. The company is reportedly looking to use the fresh capital to narrow its product portfolio and maintain pricing discipline as it works to repair its financials.
Sugar isn’t alone in facing this reckoning. Several Indian D2C brands that raised money at heady valuations during the 2021-22 funding boom have since had to accept down rounds as investors turned more cautious and prioritised profitability over pure growth. For a brand that once symbolised the successful crossover from online-first to omnichannel scale, this fundraise is a reminder of how quickly sentiment, and valuations, can shift in India’s consumer startup ecosystem. Sugar Cosmetics and A91 Partners haven’t officially confirmed the terms of the round.