Beauty and fashion retailer Nykaa will increase its stake in Dot & Key to 90 per cent from 51 per cent now for ₹265 crore and a majority stake in another clean beauty brand Earth Rhythm.
Dot & Key is a skincare brand in which Nykaa had initially invested in 2021, while it had invested in Earth Rhythm in 2022. Nykaa did not disclose how much it was paying for the additional stake in Earth Rhythm but said, it would be through a combination of primary and secondary transactions.
Suyash and Anisha Saraf, the Founders of Dot & Key, shall continue to manage and drive the business and will continue to have an ownership stake in the company, it said in a statement.
Brand’s potential
Dot & Key has grown multifold since 2021, becoming profitable in 2023 and reporting an annualised gross merchandise value of ₹750 crore in Q1 of FY25. Nykaa had invested in it in recognition of its long-term growth potential and the brand has played a key role in the growth of the retailer’s owned brands portfolio. The increase in stake by Nykaa is expected to accelerate the brand’s next phase of growth. “Entering this new phase, we plan to continue to invest deeply in the brand – across people and processes,” said Adwaita Nayar, Co-founder Nykaa.
Dot & Key has over 75 unique fruit-based formulations and has over 5 million customers, most of whom are Millennials and Gen-Zs.
Earth Rhythm is a five-year old brand that offers over 250 stock keeping units across six categories. The brand develops clean and clinically effective beauty and personal care products that are safe for both people and the planet.
Nykaa said, through its ecosystem and expertise “it will be able to further unlock the young brand’s massive potential across categories through its innovation, marketing and omnichannel distribution capabilities.”