Thursday, November 11 2021

Dive In


He was wearing a black jacket and it appears he hooked the string, attached to the hood of the jacket, to a tap in the washroom and tried to strangle himself. He was brought out unconscious and taken to the hospital. He died within 5-10 minutes.

That’s what the police say about the death of a 22-year-old Muslim labourer in custody. He had been arrested after being charged with the abduction of a Hindu girl. But photos of the rather flimsy tap—which is not very far off the ground—raised hue and cry on Twitter. His family first alleged police misconduct but have since backed down, saying: “We are poor people, and just want to survive. We are not in a position to make demands. He was alive and well when we met him… we do not know what happened later.” FYI: The girl is still missing.

Big Story

Meet the queen of Indian beauty: Falguni Nayar

The TLDR: In a startup world dominated by younger tech bros, the 58-year-old founder of Nykaa has emerged as one of the biggest winners. She is now India’s wealthiest self-made female billionaire thanks to a smashing IPO—and is among the top 20 richest persons in the country. Here’s a quick introduction to who she is—and why her success is truly notable.


First, the big fat numbers

  • On October 28, Nykaa became the first ever female-led unicorn (a company with a valuation of $1 billion or higher) to launch an IPO in India. 
  • It raised Rs 53.52 billion (5,352 crore) over three days—and its share value yesterday was nearly 80% higher than the initial offer price. 
  • When the dust settled, Nykaa was the 51st largest company in India with a market cap of about Rs 1.03 trillion (1.03 lakh crore)—ahead of the likes of Godrej and Coal India.
  • As of yesterday, Nayar was worth around Rs 555 billion (55,572 crore or $7.48 billion)—making her the 17th richest person in India.
  • She is now the seventh Indian woman billionaire—and second only to Savitri Jindal who belongs to the Jindal family, and is worth upwards of $18 billion. 
  • Nayar is way ahead of the other well-known woman billionaire Kiran Mazumdar Shaw ($3.9 billion).


Why this is a big deal: Even in the midst of a flurry of Indian startups raising crazy amounts of money, Nykaa and Nayar’s achievements are notable:


  • Let’s start with the fact that only five out of 136 unicorn founders are women.
  • Unlike its fellow startups, Nykaa is not in the red—and is the first profitable startup to go public. It reported a net profit of Rs 620 million (62 crore) in FY21.
  • Also very rare: The company has only had five rounds of funding—and only three of those were from institutional investors. 
  • All of this means that unlike her fellow founders, Nayar and her family still control their own company. After the IPO, she still has a 53.5% stake—compared to Zomato CEO Deepinder Goyal who only owns 5.5% or Paytm’s Vijay Shekhar Sharma who has 15%. In other words, her net worth is way higher than all of them. 


Ok, tell me about Nayar…

Origin story: Born and raised in Mumbai, her father owned a small bearings company. And like many Gujarati households, she grew up in the midst of constant conversation about the stock market and entrepreneurship. She insists that business is in her blood. She says: “Even at a young age, I could read balance sheets and insurance statements. At a glance, I could [advise] my dad about what would work and what wouldn’t.”


Career arc: Nayar met her husband Sanjay at IIM-Ahmedabad. After she graduated, she spent over 18 years at Kotak Mahindra Capital Co. When she left in 2012 to found Nykaa, she was the managing director and head of its institutional equities business. Hubby Nayar went on to become the CEO of global investment firm KKR India. So, yeah, they were the ultimate power couple. 


The company: Nayar founded Nykaa in 2012 when she turned 50—fulfilling a personal promise to herself to become a businesswoman before that age. This despite not knowing anything about the beauty business. The couple’s wealth was a big advantage—since the company ran on family funds for two years. OTOH, it also meant they were putting their own money on the line. FYI, the name Nykaa is a variation of Nayika—which means heroine in Sanskrit.


Dizzying growth: From 60 daily orders at launch, sales climbed to more 1,000 orders within months. Today, Nykaa receives around 70,000 orders a day and its mobile app has 55 million downloads. Around 70% of its business is from repeat customers. 


That work-life thing: Unlike ex Pepsi CEO Indra Nooyi who often emphasises the need to put family first—and not be a diva at home—Nayar’s philosophy is more matter-of-fact


“Aware of the push and pull of family life many working women face, she

says there’s no race. ‘If you need to take a few years off, you can come back. But when you come back, you need to be committed because you reap what you sow.’"


Her daughter adds: “She never really dwelt on whether one part of her life was being underserved and in the end it definitely all balanced out." And it likely helped that her husband encouraged her to prioritise work before domestic duty—as did her father: “My father treated me and my brother equally and encouraged me to aim high and pursue my dreams.”


So what’s so special about Nykaa?

Nayar was guided by three clear principles when she built the company. 


One: The importance of pricing:


“We didn’t want to be a discount store. We’d rather sell the right color of lipstick at full price, than the wrong shade at half off which would make the buyer unhappy within minutes of wearing.”


Two: She built a company that recognised the beauty needs of the average woman


“Nayar had seen that in the West entire floors of high-end department stores were dedicated to cosmetics and other beauty products. But millions of Indian women still had to visit dingy neighborhood ‘bangle’ or ‘variety’ stores for their beauty needs. These mom & pop shops, mostly staffed by male owners, stocked cosmetics and fashion jewelry alongside craft kits and other knick-knacks. Choices were limited, displays poor, and there was no chance to sample products.”


Point to note: Tier 2 and Tier 3 cities contributed to 64% of Nykaa’s revenue in 2020-21.


Three: Nayar was the very first to recognise the value of community-driven marketing—developing a loyal network of bloggers and content creators who received commissions on sales. Add to that a successful affiliate program plus social media influencers, including Bollywood celebrities.


Not all pretty: Nykaa has had its share of controversies—including allegations of a toxic work culture, sexual harassment and sales of counterfeits on its platform. And it hasn’t done very much to deal with those kinds of issues. But now that it is a publicly listed company, those kinds of problems will have a direct effect on its stock price.  


The bottomline: Falguni Nayar’s success matters most to other female founders—who struggle to raise money. Between 2018 and 2020, women-led startups raised around 5% of the total funding—which is abysmal to say the least. And its firecracker IPO assures all those male VCs what they crave most—a big exit!


Reading list

Economic Times has the best details on Nayar’s performance as a founder—and the rise of Nykaa. YourStory explains why Nykaa’s IPO is a big deal for Indian women founders. Fortune spotlights how Nykaa deftly navigated the pandemic—coming out far better than its rivals. For more on Nayar, check out these two older profiles in Mint and Outlook Business. For a less rah-rah read: The Wire takes a hard-nosed look at Nykaa’s biz fundamentals, while Quartz flags its social media problems.


Headlines that matter

Tuvalu prepares for the worst

The South Pacific nation of Tuvalu—which is looking for legal ways to remain a state even if the entire country goes under water due to rising sea levels: “We're looking at legal avenues where we can retain our ownership of our maritime zones, retain our recognition as a state under international law.” This is both sad and smart. (Reuters)

Meta’s big advertising move

Facebook and Instagram will no longer target ads based on race, politics, or religion—which is in response to pressure from civil rights leaders and policy experts. But advertisers can still target people based on age, gender, location etc. In other words, FB will be just a wee bit less creepy when stalking you. (Mashable)

The ugly reality of ‘coding for kids’

A BoomLive investigation shows that coding classes for very young children are basically a fraud. Kids as young as five are being taught complex engineering topics that cost anywhere from Rs. 7,000 to Rs. 200,000. BoomLive offers a deep dive into their curriculum—which most often sets kids up to fail.


In today’s edition

Sanity Break

  • An English language makeover of ‘Manike Mage Hithe’


Reading Habit

  • A list of awesome new releases
  • Quick fixes, aka a few varied recommendations

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