Mamaearth Holding, Backed by Shilpa Shetty, in Discussions with Fidelity, QIA, SoftBank, and Others to Raise $150 Million in Pre-IPO Round: Report

Prior to its planned initial public offering (IPO), cosmetics company Mamaearth is considering obtaining $120-150 million in a fresh investment round, according to a report on Thursday, August 24. The Securities and Exchange Board of India (Sebi) gave its clearance for Mamaearth’s parent firm Honasa Consumer Private Limited’s initial public offering (IPO) earlier this month. Due to unfavorable market circumstances, Honasa Consumer postponed its IPO in March of this year.

In order to raise capital at a valuation of $1.5 billion, Honasa Consumer is said to have had preliminary discussions with investors like SoftBank, sovereign wealth funds like Singapore’s GIC and Qatar Investment Authority (QIA), and pre-IPO investors like Fidelity Investments.

According to reports, the transaction will mostly consist of a secondary share sale since Mamaearth, a Direct-to-Consumer (D2C) unicorn profitable firm, does not currently need a main capital injection.

A few early investors want to sell shares prior to the IPO, according to a source, even though founders Varun and Ghazal Alagh are confident in their ability to provide investors with an exit via their planned public offering.

Mamaearth may become the first venture capital-funded unicorn to be listed on Indian bourses this year if it receives significant backing from investors. The last venture capital-backed startup to go public last year was Five Star Business Finance.

In December of the previous year, Mamaearth submitted draft documents to Sebi detailing a new issue of shares worth Rs 400 crore and an offer for sale (OFS) of Rs 4.68 crore shares by promoters and investors.

The founders Varun and Ghazal Alagh, Sofina Ventures SA, Evolvence, Fireside Ventures, Stellaris Venture Partners, Snapdeal founder Kunal Bahl, Bollywood actress Shilpa Shetty Kundra, Rishabh Harsh Mariwala, and Rohit Kumar Bansal are among the shareholders who will dilute their holdings through the IPO. Peak XV Partners is not expected to take part in the OFS, as was previously stated.

The husband-and-wife team Varun and Ghazal Alagh (of “Shark Tank” fame) founded Mamaearth in 2016. When the business secured $52 million in a round that was managed by Peak XV Partners in 2021, it achieved unicorn status.