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.