Why beauty funding in India reflects a maturing consumer market

Beauty acquisitions used to sit on business-pages. Now they land like pop culture events. Ingredient lists get dissected on Reddit. Reels speculate about reformulations. Group chats spiral into theories. Today, beauty acquisitions shape the future of the business of beauty in India. When Indian beauty brands raise capital or sell stakes, the shift is no longer just financial. It affects scale, distribution, governance, and consumer loyalty. 

When Estée Lauder bought The Ordinary, or when L’Oréal acquired Drunk Elephant, or when Glossier finally sold the brand after years of insisting it wouldn’t, fans reacted as though something personal had shifted.  

Beauty funding in India is now entering a similar phase. Minimalist was acquired by Hindustan Unilever in an almost-₹3000 crore deal. Secret Alchemist raised $3 million in seed funding led by Unilever Ventures. Nykaa, meanwhile, is consolidating homegrown labels like Dot & Key, Earth Rhythm, wellness brand Nudge, and activewear brand Kica. These moves mark a maturing beauty business in India, where capital increasingly determines how brands scale and grow.

While not all consumers always track funding rounds closely, what they do notice is how brands communicate and evolve. Indie beauty in India built its appeal on founder proximity. Founders themselves answered DMs from consumers. Products came with origin stories. Buying a serum, for instance, meant that consumers felt being early to something, creating a sense of closeness. As brands scale or change ownership, this structure inevitably evolves. 

When “nothing changes” means something has 

After an acquisition or a round of funding comes the same reassurance: nothing changes. Same formulas. Same teams. Same values. The most visible shift is the pace at which production increases. 

“IT IS A VERY COMPETITIVE, VERY CLUTTERED CATEGORY. AND IT OPERATES AT THE INTERSECTION OF IMPULSE AND INFORMED PURCHASE”–– Romita Mazumdar

Dr Aneesh Sheth, chemist, founder of Dr Sheth’s, and now an investor, points out that dilution rarely announces itself loudly. “Once you reach that monthly revenue stage of one crore, two crores, and your Series A [round of funding] happens, that’s when dilution tends to occur. You’ve already built aspiration. You’ve already built loyalty.” The shift is rarely immediate. It’s directional. “I know brands making 70-80 lakhs a month being told they need to launch three SKUs a month. Not extensions, but completely new products. Just to show revenue growth.” 

Elizabeth Isaac, founder of Gunam, is careful not to frame scale as the enemy. “Poorly planned scale compromises quality, but thoughtful scale does not have to.” The problem, she says, emerges when brands are built to exit. “Speed and optics often outweigh depth. If Gunam were built for a quick buyout, many decisions around formulation timelines, sourcing, and restraint would have been very different.” Restraint, in this context, is strategic infrastructure and never an aesthetic choice. 

The pressure of investor capital in Indian beauty brands

For most founders, funding alters psychology before it alters  the product. “When I started raising money, the switch flipped,” says Karishma Kewalramani, founder of FAE Beauty. “It was not just my capital and my family’s capital anymore. It was somebody else’s as well.” 

This introduces a fundamental shift. “When you are raising money, you are obligated to give that person an exit. So do not raise money unless you are confident that you will be able to provide one,” adds Kewalramani. 

In the business of beauty in India, growth comes with accountability. Founder of skincare brand Foxtale, Romita Mazumdar, describes the market plainly. “It is a very competitive, very cluttered category. And it operates at the intersection of impulse and informed purchase.” Visibility costs money. “You need a chest. Whether it comes from VC funding, generational wealth, or your own hard-earned money.” 

Why beauty brands in India require capital 

Consumer brands are structurally expensive to build. Unlike technology companies, beauty brands in India must manufacture before they sell. They must invest in compliance, testing, warehousing, distribution, and marketing long before profits stabilise. 

Margins shrink in retail. Customer acquisition costs escalate online. According toDSG Consumer Partners, on average, a consumer brand in India takes eight years to grow from zero to ₹100 crore. That is a long runway to fund alone. Capital, in this context, is less about speed alone and more about infrastructure. “Venture capital enables consumer brands to scale distribution, invest in product innovation and build stronger supply chains,” said Rukam Capital in its analysis of India’s D2C ecosystem. In this context, beauty funding in India is less about acceleration and more about infrastructure.

“VC FUNDS EXIST TO MAKE MONEY. THEY INVEST BECAUSE THEY EXPECT MEANINGFUL RETURNS” –– Aahan Chatterjee

After its funding round, beauty brand Secret Alchemist described what changed internally. “The first thing that changed was structure,” explains Ankita Thadani, the brand’s co-founder. “Funding brought sharper systems, deeper governance, and clearer long-term planning. We moved from ‘founder instinct-led hustle’ to ‘founder vision-led execution’ with scale discipline. It allowed us to invest in R&D, supply chain robustness, regulatory depth, and talent—not change what we make, but strengthen how we build it.” 

Investors see such shifts as structural, not temporary. Funding can stabilise operations, deepen R&D, strengthen supply chains, and professionalise governance. However, with capital undoubtedly comes expectations. As Ahaan Chatterjee, founder of Project Qaafi, puts it: “VC funds exist to make money. They are not operating as charities. They invest because they expect meaningful returns.” And this simple expectation shortens timelines. 

But does funding automatically dilute vision? Not necessarily. What it often changes is the pace of growth, where growth becomes measured against quarters and product cycles tighten.  

How beauty funding in India accelerates scale

Secret Alchemist is clear about what remains fixed. “Formulation is non-negotiable for us. Funding happened because of that clarity, not despite it,” says Thadani. Capital, in that case, amplifies what already existed. Sheth frames it simply: “Your valuation is a function of your brand equity. How long you sustain that equity determines how much value you ultimately create.” 

Brand equity builds slowly. Capital accelerates scale. Whether equity survives the acceleration depends on discipline. 

Independence versus investor-backed Indian beauty brands

It is often easy to romanticise the concept of an independent brand. Purearth sits close to that end of the spectrum. For the brand’s founder Kavita Khosa, being steadfast in their ethos, regardless of the noise, was important. But being an independent label often has costs. “Staying a purist when it is a business is a nightmare. Sourcing, manufacturing, packaging—nothing is easy,” shares Khosa.  

Without capital, growth slows down. Distribution expands cautiously while infrastructure develops incrementally. Investor-backed Indian beauty brands gain acceleration. Independent brands retain control over pacing. 

Neither model is frictionless, as each introduces different pressures within the beauty business in India.

What funding in the beauty industry ultimately changes

Consumers cannot influence cap tables or dictate funding rounds. What becomes visible over time are structural changes. Funding does not automatically dilute brands; independence does not automatically preserve it. The difference lies in how the capital is deployed and how discipline is maintained. 

With Secret Alchemist, Thadani describes responsible growth as “scaling distribution without compromising formulation integrity and continuing to invest in deeper research.” While this is one model, others will choose differently. 

Beauty today is no longer solely defined by what sits on a shelf. It is shaped by how a brand structures its future. While capital can expand access and strengthen operations, it can also introduce pressure to move faster.  Independence can protect control but also slow down expansion. The distinction is rarely ideological—it is operational.