Purplle, which started as an online beauty and personal care products retailer and recently expanded to offline channels, said Monday it has completed a new round of funding from sovereign wealth fund Abu Dhabi Investment Authority.
ADIA invested Rs 1,000 crore ($120 million) to increase its stake in the unicorn via a primary infusion of capital and through a secondary purchase of shares from some other shareholders, Purplle said in a statement.
The round mostly involved secondary transactions, though the company didn’t disclose the breakup of the primary and secondary portions. Verlinvest, Goldman Sachs and some angel investors were among the sellers.
The round valued Purplle around $1.25 billion, said co-founder and CEO Manish Taneja.
As part of the round, the company provided liquidity worth Rs 50 crore through Employee Stock Ownership Plan (ESOP). The company said about 85 of the 320 employees that hold ESOPs have liquidated stock worth Rs 75 crore over the years.
Purplle will use the primary capital to improve its data and AI capabilities, Taneja said. Purplle will also invest in warehouses to improve access to customers and deliver products to them quicker, he said.
While the company has partnerships with third-party retail stores to distribute its own brands, Purplle has also opened exclusive outlets, owned by the startup itself, in the last few months.
"Those are just 10 in number, and those are in very early stage of experimentation. Once we find the product market fit, where we know why customers will keep shopping with us, and know how to make these stores profitable, that's when we'll expand," said Taneja.
He added that the company will aim to figure out its store strategy by the end of current financial year and expand in the next two years.
The company also intends to expand its private label business. Over the years, the company has acquired brands to build its private label portfolio. Currently, these include Faces Canada, GoodVibes, Carmesi, Alps Goodness, and NYBae.
Purplle, operated by Manash Lifestyle Pvt. Ltd, is one of several beauty and personal care brands that have come up in India over the past decade. The company competes with the likes of Nykaa, Mamaearth, Sugar Cosmetics and MyGlamm, apart from established brands such as L’Oreal and Lakme.
“We will constantly innovate and leverage our technology and data capabilities to provide our customers with the best omnichannel experience. In increasing its shareholding in Purplle, ADIA has continued to support us as we pursue our vision of building a sustainable and profitable business,” the company said.
ADIA owns close to a 10% stake in Purplle after the round. The wealth fund had invested in Purplle last year, too, putting in $40 million. This deal valued the startup at about $1.1 billion, the same as its valuation when it raised $33 million in its Series E round from South Korea’s Paramark Ventures in 2022 to enter the unicorn club of startups.
Apart from ADIA, Purplle has raised funding from Peak XV Partners, Kedaara Capital, PremjiInvest, Verlinvest, and Blume Ventures, among others.
Last year, billionaire Sajjan Jindal-led JSW Group’s corporate venture capital arm, JSW Ventures, exited its investment in Purplle, clocking nearly 18x return on its investment. Early-stage venture capital firm Ivy Cap has also had a multi-fold exit from its investment in Purplle.
The startup reported two-fold growth in its operating revenue to Rs 475 crore for FY23, per its latest available financials sourced by VCCEdge. Its EBITDA loss widened to Rs 197 crore in FY23 from Rs 187 crore in FY22.
*This article has been updated to include comments from Purplle's CEO.