Nykaa buys digital lifestyle platform Little Black Book

Online fashion retailer Nykaa has agreed to acquire digital lifestyle guide Little Black Book for an undisclosed sum.

Nykaa, run by FSN E-commerce Ventures Ltd, will acquire the content-led shopping platform in an all-cash deal at a “mutually agreed pre-money valuation, subject to closing adjustments,” according to a statement. The transaction is expected to be completed in 60 days.

LBB is backed by venture capital firms such as Blume Ventures, Chiratae and Dream Incubator.

The online beauty and personal care and fashion company reported a net profit of 4.5 crore for the quarter ended June, a rise of 32.4% from 3.4 crore in the year-earlier on higher income from sources other than its core business.

Other income rose to 8.4 crore from 4.7 crore a year earlier.

June quarter revenue grew 41% to 1,148.4 crore from 817 crore. On the operational front, Nykaa fared relatively well with its Ebitda expanding 70% to 45.9 crore versus 26.9 crore.

The company’s Ebitda margin widened to 4% from 3.3% the year earlier.

Tax expenses, however, increased to 2.7 crore versus a credit of 37 lakh yoy. On Friday, Nykaa’s stock fell 1.7% to 1,420 on NSE.

“Our business continues to grow across verticals, despite an adverse and challenging macroeconomic environment, demonstrating the strength of our business fundamentals. The beauty vertical, online and offline, is witnessing strong growth momentum while building efficiencies across the value chain,” said Falguni Nayar, managing director and chief executive of Nykaa.

The company’s beauty and personal care vertical grew its gross merchandise value (GMV) by 39% to 1,489 crore from a year earlier, while its fashion GMV increased 59% to 582 crore.

Commenting on the investment in new growth verticals, Nayar said in a statement, “We continue to invest in building a customer proposition in fashion, with developments in platform experience and depth in assortment. The sequential growth of the fashion vertical over Q3 and Q4 comes as a result of these, along with a revival in factors such as mobility and travel.”

Nykaa claims to offer over 4,000 brands and 3.1 million product stock-keeping units (SKUs) through its website and mobile app. “We remain focused on investing in growth engines, particularly Superstore, Nykaa Man and international operations,” Nayar added in the statement.

On a sequential basis, Nykaa’s net profit saw a dip of 42.3% quarter-on-quarter, while topline and operational figures showed growth of 18% plus each.

In a separate filing on the acquisition of Little Black Book, Nykaa said the move is in line with Nykaa’s content-first approach to engaging with its loyal consumer base. The filing does not disclose the financial details of the transaction, which is expected to be completed within 60 days of execution.

LBB, which is operated by Illuminar Media Pvt. Ltd, was founded by Suchita Salwan and Dhruv Mathur in 2015. The startup focuses on audience engagement through content and discovery. It claims to have over 70 million users. The startup posted revenues of around 19.5 crore in fiscal 2020-21.

In LBB’s last main funding round in 2019, the startup raised $5 million in a Series A round led by Inventus India and IAN Fund in April 2019. Japanese investors Dream Incubator and Akatsuki Entertainment Technology Fund also contributed, as did existing investors, including Blume Ventures .

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