Funding · Commerce & Consumer Brands

Sugar Cosmetics raises funds amid valuation cut

By Startup Enthusiast · 7 September 2026

What they do

Sugar Cosmetics sells makeup, skincare, and personal care products through online and offline channels

The company raised ₹144.5 crore from A91 Partners at a post-money valuation of approximately ₹550–600 crore

This funding follows a significant valuation drop of over 75% from previous peaks due to rising losses

Sugar Cosmetics has raised ₹144.5 crore in a new funding round led by A91 Partners.
A91 Partners is an existing shareholder that subscribed to the entire issue of new shares.
The investment values the company at a post-money valuation between ₹550 crore and ₹600 crore.
This represents a sharp decline of 75–80% from its November 2024 peak valuation of roughly ₹2,600 crore.
The capital will be used for working capital needs and to support the growth of its Quench skincare brand.
The board approved the transaction on 1 September 2026, allotting specific preference shares to the investor.
Early backers are reportedly selling stakes in secondary market transactions worth up to ₹150 crore.
The company faces sustained financial deterioration with cumulative losses reaching approximately ₹375 crore over five years.

The valuation cut reflects significant pressure on the beauty startup's financial performance.
Revenue fell nearly 20% in FY25 compared to the previous fiscal year.
Net losses more than doubled in FY25, indicating challenges in achieving profitability.
Store closures suggest issues with unit economics in its offline expansion strategy.

Sugar Cosmetics manufactures and sells makeup, personal care, and skincare products.
It operates through its own website, major online marketplaces, and physical retail stores.
The brand runs over 200 exclusive outlets across 50 cities in India.
Its total retail touchpoints reach approximately 50,000 locations nationwide.
Distribution networks cover 550 cities across the country.
FY25 operating revenue was reported at ₹404–404.4 crore, down from ₹505 crore in FY24.
The company recorded a net loss of ₹134–135 crore in FY25, up from ₹67 crore in FY24.
EBITDA losses widened significantly to ₹108–116 crore in FY25 from ₹48 crore in FY24.
No profitable year has been recorded since FY21 despite continuous operations.

A91 Partners (lead) — An investment firm acting through its Emerging Fund III vehicle.

Product: Beauty and cosmetics products sold through omnichannel channels.
Customers: Indian beauty consumers.
How it makes money: Consumer brand selling directly to shoppers across online and offline channels.
What sets it apart: Known as a digital-native D2C beauty brand.
Operations: Runs an omnichannel beauty business from Mumbai.