Nykaa completes acquisition of additional 39% stake in Dot & Key

Following the latest transaction, Nykaa’s stake in Dot & Key has increased from 51% to 90% in the previous years

Founded in 2018, Dot & Key offers diversified skincare solutions and is expected to be profitable in Q4 FY2023

Apart from Dot & Key, Nykaa also announced plans to acquire an additional stake in cosmetics brand Earth Rhythm for INR 44.5 Cr

Direction Beauty and e-commerce Nykaa increased its stake in Kolkata-based skincare brand Dot & Key by acquiring an additional 39% stake for INR 265.3 Cr.

Following the latest transaction, Nykaa’s stake in Dot & Key has risen to 90% from 51% earlier, it said in a stock exchange filing on Saturday (September 21).

Last month Nykaa said this will purchase 5.29 lakh ordinary shares of Dot & Key from the founders and current shareholders.

Notably, Dot & Key is the first direct-to-consumer (D2C) brand acquired by Nykaa. It acquired 51% stake in Dot & Key in 2021.

Founded in 2018, Dot & Key offers differentiated skincare solutions. Nykaa had earlier said the brand has been profitable since the fourth quarter (Q4) of fiscal year 2022-23 (FY23). Dot & Key’s revenue grew by a steep 244% to INR 198.3 cr in FY24 from INR 57.7 cr in the previous year.

In its Q1 FY25 earnings statement, Nykaa founder and CEO Falguni Nayar said, “It was a fantastic investment by Nykaa and (that’s why) we decided to acquire an additional 39% stake… What we like about Dot & Key is its diverse product range. It also has packaging that is space-saving, unique and patented.”

Apart from Dot & Key, Nykaa also announced plans to acquire an additional stake in beauty brand Earth Rhythm for INR 44.5 Cr. The transaction is expected to be completed by September 2025.

Founded in 2019, Earth Rhythm is a D2C skincare and beauty brand with over 250 SKUs. Its revenue grew by 20.3% to INR 30.7 Cr in FY24 from INR 24.5 Cr in FY23.

It is worth mentioning that Nykaa has acquired 18.6% stake in Earth Rhythm in 2022.

The acquisitions are part of Nykaa’s broader strategy to strengthen its position in the beauty and personal care segment in India, a growing market that is expected to become a $28 billion opportunity by 2030 and account for 7% of the e-commerce market.

To strengthen its revenue and attract more customers, Nykaa has also increased its same-day and next-day delivery offerings. At the company’s 12th annual general meeting, CEO Nayar said the company now delivers 60% of its orders the next day in 110 major cities, which account for two-thirds of the company’s total orders.

The e-commerce giant has also stepped up its efforts to expand its presence in the Middle East. Nykaa has two new subsidiaries were established in Qatar and Saudi Arabia under the Nysaa brand as the company looks to capitalize on market opportunities in the Gulf Cooperation Council (GCC) region.

The GCC countries’ annual expenditure on cosmetics and personal care products is as much as $500, which is one of the highest amounts in the world.