SUGAR Cosmetics raises ₹145 Cr from A91 at steep valuation

SUGAR Cosmetics has raised ₹144.47 crore (approximately $15.3 million) in a fresh equity round from venture capital firm A91 Partners. The startup's board passed the resolution for this funding on September 1, according to MCA filings accessed by Inc42.

The funding arrives at a significantly reduced valuation. Inc42's calculations indicate the round, which appears to be a Series D equity infusion, values the company at ₹550-600 crore post-money. This represents a drastic 75-80% cut from the ₹2,600-2,700 crore valuation the D2C beauty brand commanded when it last raised funds in November 2024. The company's peak valuation was around ₹3,000 crore ($500 million) in 2022.

Financial Performance Deteriorates

The new capital follows a period of severe financial strain for the company. For the fiscal year FY25, SUGAR's operating revenue plunged by about 20% year-on-year to ₹404.4 crore, down from ₹505.1 crore in FY24.

The company's losses widened substantially. Its net loss nearly doubled to ₹135 crore in FY25 from ₹68.4 crore the previous year. Also, its EBITDA losses more than doubled, reaching ₹116 crore against ₹48.5 crore in FY24. The startup has not yet reported its financials for FY26.

In a valuation report dated June 30, 2026, attached to the filings, registered valuer Sayali Deshkar wrote, "The company has demonstrated a sustained and worsening pattern of financial deterioration over the past two financial years."

Offline Expansion Challenges

A key factor impacting SUGAR's economics was its aggressive offline retail expansion. Citing an ET report, Inc42 notes the startup had to shut down 30-40% of the physical stores it opened due to losses incurred per store. This push into brick-and-mortar retail contributed significantly to its mounting financial pressures.

Funding Round Mechanics

The company allotted 1.12 lakh Series D7 compulsory convertible preference shares (CCPS) to A91 Partners' entity, A91 Emerging Fund III, at an issue price of ₹12,871 per share. The startup's pre-money valuation for this round stood at ₹433.6 crore. These CCPS will automatically convert into equity shares upon the startup's listing or one day prior to the expiry of 20 years from their issue date.

Company Background and Market

Founded in 2015 by Vineeta Singh and Kaushik Mukherjee, the Mumbai-based company sells beauty and personal care products through its own website, physical stores, and e-commerce platforms. To date, SUGAR has raised approximately $90 million from investors including Elevation Capital, A91 Partners, Anicut Capital, and IndiaQuotient.

The company operates four brands: SUGAR, POP, ENN, and Quench Botanics. It competes in a crowded market with listed rivals like Nykaa and Mamaearth, as well as other players such as Renee Cosmetics. The beauty and personal care segment is one of the most funded within India's D2C ecosystem, having attracted over $1.1 billion across 201 deals between 2015 and the first quarter of FY26. Inc42 has reached out to SUGAR Cosmetics for comment on the latest funding and valuation cut, and states the story will be updated if a response is received.