Our gut feel was validated says Cosmetic Brand SUGAR’s first investor

Image used for illustrative purposes only

In only 5 years, cult favourite brand SUGAR clocks 49X returns for it’s earliest investor


SUGAR Cosmetics, a cult-favourite amongst Gen Z and millennials, is one of the fastest-growing premium beauty brands in India. Launched in 2015, the brand has quickly made its way into most makeup aficionado’s vanity.

The year 2021 was off to a strong start for the digital-first beauty player as they announced a US $21 Million (INR 153 Cr) Series C funding round in early February. As part of this Series C, India Quotient – the company’s earliest backer marginally trimmed their holding to clock a 49X return on their investment at an IRR of ~61%.


Till date, the company has raised a total of US $33 Million funds. India Quotient has consistently backed the founding team of Vineeta Singh and Kaushik Mukherjee through all four rounds of funding till date including the recently concluded Series C where it co-invested with Elevation Capital and A91 Partners. As a result of this continued participation across rounds, India Quotient is currently the second largest institutional investor of the company with a stake worth more than its first two funds put together.

India Quotient first invested in 2013 when the parent company Vellvette Lifestyle Pvt. Ltd. was pursuing a beauty subscription service business model. In 2015, SUGAR Cosmetics was launched under the same company with a limited range of Crayon Lipsticks, Vivid Lipsticks, Matte Eyeliner and Kajal that disrupted the online cosmetics market. With matte, long-lasting makeup with shades that were specifically suited for Indian skin tones, the brand grew virally through rave reviews on Instagram and YouTube. Starting with net revenue of INR 3 CR in 2016-2017 the brand successfully clocked in INR 105+ CR in its 4th fiscal year, reaching an 85% YOY growth rate – while notching up 1.5+ million followers across social media platforms by the side.

Image for illustration purpose only.

Speaking of an untold story of a contrarian bet for the brand in 2015, Ms. Vineeta Singh, Co-founder & CEO, SUGAR Cosmetics says:  “SUGAR Cosmetics started as a direct-to-consumer cosmetics brand in 2015 with products that were specifically created for young Indian women. It was also at this time when the company was pivoting from the beauty subscription service to a cosmetics brand, it came very close to shutting down.

In 2016, having already infused capital from their 1st Fund, the partners at India Quotient, Madhukar Sinha and Anand Lunia were clear that their fiduciary duty towards their Limited Partners ruled out any possibility of any further investment from their successor fund without an external investor leading the round. However, for reasons best known to them, they took an extremely risky call of lending the company 1 Cr from the funds ‘reserve for AMC fees’ amount that VCs earn for managing the fund.

“Had it not been for that unexpected infusion, we would have been unable to pay our German manufacturers to release the products that were ready for delivery – and the company would never have reached the 2017 Series A which eventually set the brand up on a different trajectory altogether. It gives us immense joy to be able to return 49x of their investment to them and thank them for the pivotal role they’ve had and continue to have as SUGAR scales,” says Singh.

Apart from investments in keeping the brand’s fast-moving product range ahead of the curve, SUGAR plans on using their latest funds in building both digital and retail distribution to further their reach in existing and new geographies. The brand’s Android and iOS apps have seen a million downloads with a 4.6-star rating, indicating a strong community of beauty enthusiasts that the brand speaks to. The retail footprint is also expected to grow from the current 10,000+ retail outlets to 40,000+ in the current year.

Adding to SUGAR’s success story, Madhukar Sinha, founding partner, India Quotient said; “Ever since the launch of our operations in 2012, we have invested in over 70 start-ups. While we first backed the founders in 2013, we did infuse some amount in SUGAR Cosmetics in 2016 from the first fund’s ‘reserve for AMC fees’ amount – we just knew that this association was to go a long way. The projections of the online beauty industry and the all-in approach of the team just had to be seen through to the Series A fundraise in June 2017.”


Seeing the brand grow to become a cult-favourite among millennial women was a proud moment for us as well because we knew that the gut feel was validated. Watching how quickly SUGAR was carving their mark in the beauty industry, we returned to invest in the brand in their Series B & Series C rounds as well. For a brand that is merely 5 years old, SUGAR has taken the industry by storm and we are happy to be a part of their success journey.” Madhukar Sinha, Founding partner, India Quotient