The Visionary Behind the Brand: Falguni Nayar

Nykaa was founded in 2012 by Falguni Nayar, a seasoned professional turned entrepreneur. Her vision was to disrupt India’s fragmented beauty market by creating a trusted, curated platform that offered authentic products and bridged the gap between global trends and local consumers. (Falguni Nayar) 

Falguni Nayar holds a prestigious postgraduate diploma in management from the Indian Institute of Management, Ahmedabad (IIM-A). Prior to launching Nykaa, she spent nearly two decades building a remarkable career in investment banking and financial services. She joined Kotak Mahindra Capital Company in 1993 and rose to become its Managing Director, handling key roles in mergers, acquisitions, and equity offerings. During her 18-year tenure, she solidified her reputation as one of India’s foremost investment bankers.  

The Founding Story of Nykaa  

Inspired by the lack of organized retail platforms for beauty products in India, Nayar left her high-profile banking career in 2012 to pursue entrepreneurship. The name Nykaa is derived from the Sanskrit word Nayaka, meaning “actress” or “one in the spotlight,” symbolizing empowerment and confidence.  

At the time, India’s beauty industry was dominated by unorganized local stores and limited access to premium international brands. Nayar identified an opportunity to create a scalable, omnichannel retailer that combined e-commerce with offline stores. Starting as an online marketplace, Nykaa prioritized authenticity—a critical differentiator in a market rife with counterfeit products. She personally engaged with global brands to secure partnerships, ensuring Nykaa offered a diverse portfolio of over 2,400 brands, including luxury labels.  

Despite skepticism about her transition from finance to beauty retail, Nayar’s strategic focus on content-driven engagement (through blogs, tutorials, and virtual try-on tools) and inventory-led fulfillment helped Nykaa gain consumer trust. The company expanded into offline retail with Nykaa Luxe, On Trend, and kiosk stores, creating a seamless omnichannel experience.  

Today, Nykaa stands as a testament to Nayar’s vision, with a valuation exceeding $13 billion during its 2021 IPO. Recognized among TIME100’s Most Influential Companies (2022) and lauded for empowering consumers with choice and accessibility, Nykaa reshaped India’s beauty landscape under Nayar’s leadership.  (Reuters)

India’s Booming Cosmetics Market: A Goldmine for Nykaa

India’s cosmetics market is experiencing significant growth, driven by increasing disposable incomes, urbanization, and a heightened awareness of personal grooming. In 2024, the market was valued at approximately USD 14.6 billion. Projections indicate that by 2033, it will reach around USD 24.3 billion, reflecting a compound annual growth rate (CAGR) of 5.9% from 2025 to 2033. (​IMARC)

Several factors contribute to this upward trend. The expanding middle class and their increased spending power have led to higher expenditures on personal care products. Rapid urbanization exposes consumers to global beauty trends, fostering a demand for diverse and innovative products. Additionally, the country’s substantial youth population, influenced by social media platforms like Instagram and YouTube, is more inclined towards experimenting with cosmetics. (Mordor Intelligence)

E-commerce platforms have revolutionized product accessibility, offering a wide range of options and personalized shopping experiences, even in remote areas. This shift has been instrumental in the market’s expansion. Furthermore, there’s a growing preference for organic and herbal cosmetics, driven by increased awareness of sustainability and health concerns. This has led to a surge in demand for Ayurvedic and plant-based products. 

The male grooming segment is also witnessing notable growth. Changing societal attitudes have encouraged men to invest in grooming products beyond traditional categories, contributing to the market’s diversification. 

Nykaa’s Mission: Making ‘Flawless’ Accessible (Even on a Budget)

Mission & Vision  

Nykaa’s mission is to “inspire confidence and celebrate individuality” by making premium beauty and wellness accessible to all Indians. Its vision is to become India’s most-loved beauty destination, fostering trust through authenticity and innovation.  

Problems They Solve  

Before Nykaa’s inception in 2012, India’s beauty market was fragmented, with limited access to genuine international brands and a lack of reliable online platforms. Nykaa addressed these gaps by:  

– Offering 100% authentic products through a curated inventory.  

– Bridging the accessibility gap via its omnichannel model (online platform + 130+ offline stores).  

– Educating consumers through content-driven initiatives like the Beauty Book blog.  

Business Model  

Nykaa operates an inventory-led omnichannel model, combining e-commerce with physical stores. It earns revenue through product margins, platform fees from third-party sellers, and private-label sales.  

 The platform also boasts in-house brands like Nykaa Cosmetics (launched in 2015), Kay Beauty (in partnership with actress Katrina Kaif), and Nykd by Nykaa (intimate wear), catering to niche segments. Its omnichannel strategy includes:  

– Nykaa Luxe: Flagship stores featuring luxury international brands.  

– Nykaa On Trend: Curated selections of trending products.  

– Nykaa Beauty Kiosks: Compact outlets for quick purchases  

Nykaa’s tech-driven approach includes a virtual makeup try-on tool and an Expert Portal for personalized consultations. It serves over 8 million customers monthly and was named to TIME100’s Most Influential Companies 2022. Recent ventures like acquiring Earth Rhythm (clean beauty) and Little Black Book (content commerce) underscore its aggressive diversification.  

AR Try-Ons and Beauty Blogs: Nykaa’s Magic Behind the Gloss

Nykaa’s dominance in India’s beauty and fashion retail sector is anchored in its strategic use of technology and omnichannel innovation, creating seamless shopping experiences for millions of customers. Below is a detailed breakdown of the technologies and innovations that drive Nykaa’s operations:  

 1. Inventory-Based Model & Warehouse Infrastructure  

Nykaa employs an inventory-based model to ensure product authenticity and timely delivery. Its warehouses in Mumbai, New Delhi, Pune, Haryana, Kolkata, and Bangalore are equipped with advanced inventory management systems that streamline order processing, reduce delivery times, and minimize stock discrepancies. This model allows Nykaa to maintain direct control over product sourcing, storage, and distribution, ensuring customers receive 100% authentic products. This infrastructure also supports Nykaa’s ability to manage a vast catalog of over 2,400 brands efficiently.  

 2. Virtual Makeover Tool  

Nykaa’s Virtual Makeover Tool leverages augmented reality (AR) to enhance the online shopping experience. Customers can virtually “try on” makeup products like lipsticks, eyeliners, and eyeshadows using their device cameras. This interactive feature bridges the gap between offline trial experiences and online convenience, reducing purchase hesitancy and boosting customer engagement. The tool has been integral to Nykaa’s success in driving digital sales, particularly during the pandemic.  

 3. Content-Driven Engagement  

– Beauty Book: Nykaa’s blog, Beauty Book, offers expert-written tutorials, trend analyses, and product reviews. This platform educates customers on skincare routines, makeup techniques, and wellness practices, fostering trust and loyalty.  

– Expert Portal: The Expert Portal connects users with professionals in skincare, haircare, and wellness for personalized consultations. This feature uses a mix of live chat and AI-driven recommendations to address customer queries, ensuring tailored shopping journeys.  

 4. Omnichannel Integration  

Nykaa seamlessly integrates its online platform with 80+ offline stores (as of 2024), including luxury boutiques (Nykaa Luxe), trend-focused outlets (Nykaa On Trend), and compact kiosks. The company uses real-time inventory synchronization across channels, allowing customers to check product availability online before visiting physical stores. This synergy enhances accessibility and caters to diverse consumer preferences.  

 5. Strategic Tech-Driven Acquisitions  

Nykaa’s acquisition of Little Black Book (LBB), a lifestyle content platform, underscores its focus on content-commerce integration. By merging LBB’s curated guides and reviews with its e-commerce ecosystem, Nykaa strengthens its position as a trusted beauty and lifestyle hub.  

These innovations have propelled Nykaa’s growth, reflected in its 61% profit surge in Q3 2024 and its inclusion in TIME100’s Most Influential Companies 2022. The platform’s blend of technology, content, and inventory control has set industry benchmarks for customer-centric retail in India.  

Global Dreams: How Nykaa is Conquering India and Beyond

Nykaa’s influence extends beyond financial metrics. The company actively fosters innovation within the beauty industry. In collaboration with Estée Lauder’s New Incubation Ventures, Nykaa co-hosted the third Beauty&You Awards on October 17, 2024, in New Delhi. 

This initiative supports emerging beauty entrepreneurs in India by providing financial aid, mentorship, and access to vital resources. Winners were recognized for their innovative approaches in various categories, underscoring Nykaa’s commitment to nurturing new talent and promoting industry growth. ​Vogue Business

Furthermore, Nykaa’s strategic vision includes global expansion. The company launched Nysaa in the Gulf Cooperation Council (GCC) market in March 2024, reflecting its ambition to extend its footprint beyond India. The GCC represents a substantial beauty and personal care market opportunity, with per capita consumption exceeding $500. Nysaa plans to open five new stores within the year and aims to establish 70 stores over the next five years, showcasing Nykaa’s proactive approach to capturing international markets.

Earth Rhythm to Katrina Kaif: Nykaa’s Acquisition Spree (Because Why Not?)

Nykaa’s growth as India’s leading beauty and lifestyle retailer is fueled by strategic partnerships, acquisitions, and collaborations that expand its product portfolio, enter new markets, and strengthen its omnichannel presence. These alliances reflect Nykaa’s commitment to innovation and diversification.  

1. Earth Rhythm (Sustainable Beauty)  

In 2022, Nykaa acquired an 18.51% stake in Earth Rhythm, a sustainable beauty brand, for ₹41.65 crore. This move bolstered Nykaa’s presence in the fast-growing clean beauty segment, aligning with rising consumer demand for eco-friendly and toxin-free products. Earth Rhythm’s expertise in natural formulations complements Nykaa’s goal to cater to environmentally conscious shoppers.  

2. Kica (Activewear Brand)  

Nykaa acquired the activewear brand Kica for ₹4.51 crore to enhance its fashion vertical, Nykaa Fashion. Kica’s focus on affordable athleisure wear allowed Nykaa to tap into the booming fitness and wellness market, offering consumers stylish and functional activewear.   

3. Nudge Wellness (Nutraceuticals)  

   Partnering with Onesto Labs, Nykaa entered the nutraceuticals sector through Nudge Wellness. This collaboration introduced dietary supplements and nutricosmetics, addressing the growing consumer interest in holistic health and beauty-from-within solutions.  

4. Little Black Book (LBB) Acquisition  

   Nykaa fully acquired Little Black Book (LBB), a lifestyle content platform, to integrate content-driven commerce into its strategy. LBB’s curated guides and reviews enhance customer engagement, driving informed purchasing decisions.  

5. Kay Beauty (Celebrity Collaboration)  

   In 2019, Nykaa partnered with Bollywood actress Katrina Kaif to launch Kay Beauty, a makeup line emphasizing inclusivity and self-expression. This celebrity-driven brand strengthened Nykaa’s in-house portfolio and resonated with younger audiences.

Unicorn Status and Beyond: The Numbers Behind Nykaa

The company’s revenue has surged from ₹5 billion in FY2018 to over ₹64 billion in FY2024, reflecting a compound annual growth rate (CAGR) of approximately 37.8%. (Nykaa)

In FY2024, Nykaa reported a revenue of ₹64.16 billion, marking a 24% increase from ₹51.74 billion in FY2023. The company’s net profit after tax (PAT) for FY2024 stood at ₹400 million. This growth trajectory continued into FY2025, with Q3 revenue reaching ₹22.67 billion, a 27% year-on-year increase, and a net profit of ₹261.2 million, up 61% from the same quarter in the previous year. (​Equitymaster) (Reuters)

Nykaa’s funding journey has been instrumental in its expansion. The company has raised a total of ₹8.88 billion through various funding rounds. Notably, in March 2020, Nykaa secured ₹1 billion in a Series F round led by Steadview Capital, valuing the company at over $1.2 billion and marking its entry into the unicorn club. Subsequent funding rounds, including a ₹670 million raise in May 2020, further bolstered its financial position.​

The company’s revenue streams are diversified across product sales and services. In FY2024, revenue from product sales amounted to nearly ₹55 billion, underscoring the strength of its core business. Nykaa’s beauty segment, contributing over 90% of total revenue, saw a 27% rise in sales during Q3 FY2025, reaching ₹20.6 billion. ​Statista

Nykaa’s financial health is also reflected in its gross merchandise value (GMV), which grew by 29% to ₹36.53 billion in Q2 FY2025. This growth is attributed to strategic marketing investments and collaborations, such as the co-development of Kay Beauty with Bollywood actor Katrina Kaif. 

The Finish Line: Nykaa’s Journey From Startup to Spotlight

Nykaa, India’s leading omnichannel beauty and fashion retailer, has redefined the landscape of beauty and personal care since its inception in 2012. Founded by Falguni Nayar, a seasoned professional with decades of experience in finance and e-commerce, the company bridges the gap between global beauty trends and Indian consumers through its innovative platform. Operating both online and offline, Nykaa offers over 2,400 brands across makeup, skincare, haircare, fragrances, and wellness, alongside its in-house labels such as Nykaa Cosmetics, Kay Beauty (in partnership with Katrina Kaif), Nykd by Nykaa (intimate wear), and Pipa Bella (jewelry). Its offline presence includes Nykaa Luxe stores for luxury brands, Nykaa On Trend for popular products, and kiosks for quick purchases, ensuring accessibility to a diverse audience.  

The company’s success is driven by a robust inventory-based model, tech innovations like its virtual makeover tool and Beauty Book blog, and strategic acquisitions. Acquiring stakes in Earth Rhythm (sustainable beauty), Kica (activewear), and Little Black Book (content platform), highlight its ambition to dominate niche markets. Nykaa’s financial growth further underscores its market leadership, with a 61% profit surge in Q3 FY2024, attributed to rising demand for premium beauty products. Recognized in TIME100’s Most Influential Companies list (2022), Nykaa continues to set benchmarks in customer engagement and operational excellence.  

For aspiring entrepreneurs, Nykaa’s journey exemplifies how innovation, customer-centricity, and strategic diversification can disrupt traditional industries. If you’re inspired to turn your ideas into reality, now is the time to act. For more insights into startups and industry trends, explore other articles on Venture Kites.