South Asian Beauty Startups Are Grabbing VC Dollars

• A number of new startups are drawing inspiration from South Asian beauty traditions.
• Some brands focus on “inclusive” beauty which VCs say is a fast-growing sector.
• Others focus on skincare and wellness, areas which saw an uptick in investment during the pandemic.

From saffron face serums for firming and brightening to turmeric teas for hair growth, a growing number of beauty startups are drawing inspiration from the Indian subcontinent.

Some are bringing the principles of Ayurveda — an ancient system of holistic medicine that’s traditional in India — to western consumers.

These startups are billing themselves as wellness brands and introducing American customers to beauty rituals that South Asian women have been practicing for centuries. Others are launching cosmetics lines that address concerns common to women with darker skin tones who have long been neglected by mainstream beauty brands. 

The inclusive beauty space is a fast-growing sector, according to Daphne Che, a principal at Montage Ventures. Her firm is a lead investor in Live Tinted, a South Asian-founded cosmetics brand that raised $3 million in funding in 2021. Other investors in the brand include Halogen Capital and Curate Capital. 

Aavrani, a pioneer in luxury Ayurvedic skin care which launched in 2018, has raised almost $10 million in two rounds from firms like Amplifyher and The MBA Fund, according to Crunchbase. 

Over the past year, venture-capital investment in beauty and wellness companies has jumped significantly. Between 2016 and 2020, the average amount of funding raised by individual companies in this space was around $1 million. By 2021, that number climbed to $3.2 million, according to Crunchbase.

Some of the past year’s biggest beauty news came from companies based in India.  MyGlamm, a Mumbai-based direct-to-consumer beauty startup, ascended to unicorn status with a valuation of $1.2 billion. 

Nykaa, a fashion and beauty e-commerce firm, made almost $13 billion in its debut on India’s National Stock Exchange, and launched its founder, Falguni Nayar, to the status of India’s richest self-made billionaire.

Many emerging beauty startups operate as direct-to-consumer, or DTC, companies, which means they sell their products straight to consumers without the help of middleman retailers. The recent surge in investments in these companies can be attributed to the broader success of DTC vanguards like Dollar Shave Club, Warby Parker, and Casper. Not that all successful DTC brands are completely infallible. Glossier, the “cool-girl” beauty brand that catapulted to massive success in 2019, laid off 80 employees in January. 

Still, several Ayurvedic skin- and hair-care startups have popped up following Aavrani’s success, such as Soma Ayurvedic, Fable & Mane, and Prakti Beauty, which was founded by the model Pritika Swarup.

Business of Fashion predicts that by 2026 the global Ayurvedic products market will triple in growth from 2017, and reach a total of $14.9 billion in value. Established beauty houses have jumped on the trend, too. Estée Lauder recently invested in the New Delhi-based luxury skin-care brand, Forest Essentials.    

Deepica Mutyala, the founder of Live Tinted, often weaves her own experiences as a girl of South Asian descent growing up in Texas into the company’s campaigns. She’s said she would dye her hair blonde to meet Western beauty standards, but still grapple with biases against darker skin within the Indian American community.

Mutyala found herself at odds with both Indian and Western ideals of beauty. Her signature product, the Huestick, is born out of that struggle. Che calls Mutyala an “outsider to the industry but an insider to the problem” and said that it was one of the many reasons her firm was compelled by Mutyala’s vision. 

Priyanka Ganjoo, a Harvard Business School graduate, launched Kulfi Beauty in 2020 out of a similar personal impetus. Ganjoo, like many women of South Asian descent, has dark under-eye circles, so she would wear colorful makeup to distract from them. Her line of vibrant eyeliners builds off that childhood practice. Ganjoo says she would consider VC funding if she found the right partner, but they would have to be someone who aligns with Kulfi’s goal of building an inclusive global brand. 

“Before starting Kulfi, I would encounter brands that tokenized and appropriated South Asian culture,” Ganjoo said.  

“Finally, I decided it was time for a South Asian founder to reclaim our narrative and represent our community through our products, our storytelling, and our actions.”