Mumbai-based skincare start-up Foxtale Consumer has raised 120 crore (Rs1.2bn, $14 million) in a recent funding round. The funding was led by Singapore-based Panthera Growth Partners and existing investors Matrix Partners India and Kae Capital also participated.
The funding comes at a time when Indian health and beauty companies are filling losses: Mamaearth, a personal care company known for its natural products, filed a loss of Rs155 crore [Rs equivalent] in FY23, and Indian beauty company Plum filed INR52 crore [Rs equivalent] for the 2022 to 2023 financial year. Foxtale also filed Rs18 crore [Rs equivalent] in net loss in FY23. But this investment in Foxtale indicates the continuing confidence of investors in the potential of the Indian health and beauty market.
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Foxtale, which was founded in 2021, claims to offer affordable skincare products and places high importance on consumer feedback. It includes feedback from users at each step during product development and launches only those products that have more than a 90% repeat rate.
Rise in urbanisation is creating demand
This shows how affordable pricing and customer feedback are important in a price-sensitive country such as India. In a GlobalData Q4 2023 consumer survey, 66% of Indian respondents stated that time and money constraints drive their choices in health and beauty products.
While high spending on marketing and branding has led to losses for health and beauty startups in India, these companies are still expected to perform well in the long term. One reason is the increase in female beauty influencers in the country in recent years. These content creators are responsible for the rise in awareness of health and beauty products and practices among Indian consumers. The rise in urbanisation and modern lifestyles will create further demand. Focus on affordability will play a major role in the success of Indian health and beauty companies.
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