BENGALURU — Mumbai-based beauty and skincare startup Nykaa said Tuesday it had raised 1 billion rupees ($13 million) in fresh funding led by existing investor Steadview Capital.

This comes at a time when venture capital investments are expected to slow down due to the global spread of COVID-19 and as investors look to back companies that offer essential services or products, with the coronavirus pandemic likely to have an adverse effect on discretionary spending.

“We are very grateful to achieve this significant milestone. We deeply value the trust and support of our investors, customers and brand partners who have been instrumental to our success. In the midst of this unprecedented global crisis we are working to ensure all our stakeholders are well served and that Nykaa emerges as a leading retail player in the industry,” Falguni Nayar, founder and CEO of Nykaa, said in a press statement.

Founded in 2012 by Nayar, a former investment banker, Nykaa is one of the few profitable startups in India. It reported a net profit of $303,000 in the financial year ending March 31, 2019.

The eight-year-old omnichannel company that sells beauty and skincare products through retail stores and its online platform, raised $14 million last year led by TPG Growth. The company has now raised a total of about $120 million from a dozen investors including Steadview Capital, TPG Growth and Sharrp Ventures. It operates more than 50 physical stores across the country and claims to have products from more than 1,000 brands on its online platform.

Due to the announcement last week of a 21-day lockdown in India to contain the spread of novel coronavirus, Nykaa has temporarily suspended all operations and informed its vendors and business partners that payments would face delays.

The company competes with vertical online platforms such as Purplle, MyGlamm, personal haircare brand Bare Anatomy and Grofers’ private label Orange Something. In the horizontal e-commerce space, it competes with the likes of Amazon India and Flipkart.

Investments in the beauty and personal care space are likely to reduce this year as spending on luxury products is expected to fall. Last year saw such investments double to $108 million, compared with $51 million in venture capital funding in 2018. According to a report by RedSeer Consulting, India’s online beauty and personal care market is set to exceed $3.5 billion by 2022, up from $300 million in 2017.

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