SUGAR Cosmetics Raises ₹144.5 Crore from A91 Partners

SUGAR Cosmetics has secured ₹144.5 crore in fresh funding from existing investor A91 Partners, providing the Indian D2C beauty brand with additional capital as it works to strengthen its business and rebuild growth.

The latest investment represents continued backing from an existing shareholder at a time when SUGAR is navigating a significant shift from its earlier high-growth phase.

A91 Partners has subscribed to the entire issue, taking its stake in the company to approximately 19.97% following the transaction.

Fresh capital at a significantly reset valuation

SUGAR’s latest funding round places the company at a valuation of approximately ₹755 crore.

That represents a substantial decline from the company’s peak valuation of nearly ₹3,000 crore in 2022, when investor enthusiasm around India’s consumer and D2C businesses was considerably stronger.

The latest round therefore comes against the backdrop of a broader reset across India’s startup ecosystem, where investors have increasingly focused on profitability, operating efficiency and sustainable growth rather than valuation-led expansion.

For SUGAR, the new capital provides additional room to strengthen its financial position and focus on the fundamentals of the business.

A91 Partners increases its commitment

The entire funding round has been backed by A91 Partners, which was already an investor in SUGAR.

The company’s board approved the allotment of 1,12,248 Series CCPS at ₹12,871 per share, with A91 subscribing to the complete issue.

The investment signals continued confidence from an existing institutional investor as SUGAR works through its current business challenges.

There have also been discussions around potential secondary transactions involving some existing shareholders, with deals of up to approximately ₹150 crore being explored. Unlike such secondary transactions, the latest A91 investment represents fresh primary capital entering the business.

From online-first brand to omnichannel player

Founded by Vineeta Singh and Kaushik Mukherjee, SUGAR started as an online-focused beauty company and subsequently expanded its physical retail presence.

The brand now reaches consumers through multiple channels, including its own digital platform, online marketplaces and offline retail outlets.

Its positioning has been particularly focused on younger Indian consumers, helping it establish recognition in the country’s increasingly competitive cosmetics and personal care market.

In 2022, SUGAR raised $50 million in Series D funding led by L Catterton, when the company was valued at around $400 million.

At the time, the business was investing heavily in expanding its offline footprint and strengthening its position within India’s rapidly growing beauty market.

Financial performance creates pressure to rebuild

The fresh funding comes after a difficult period for SUGAR’s financial performance.

The company’s revenue fell by approximately 20% in FY25, declining from ₹505 crore in FY24 to ₹404 crore.

At the same time, its net loss expanded from ₹68 crore to ₹135 crore.

The numbers underline the challenges facing the company as it attempts to balance brand-building and distribution expansion with healthier financial performance.

The latest funding could provide SUGAR with the financial flexibility required to address these areas while concentrating on its strongest categories and consumer segments.

A reset with focus on fundamentals

The new investment marks a different phase for SUGAR compared with its rapid expansion during the D2C boom.

Rather than focusing primarily on scale, the company’s priorities now include strengthening its product portfolio, improving unit economics and rebuilding demand.

SUGAR’s existing brand recognition and omnichannel distribution network provide a foundation from which the company can attempt to regain momentum.

For a consumer brand operating across both digital and physical channels, improving the productivity of its retail network while maintaining a strong digital presence will remain important to future growth.

Vineeta Singh signals focus on rebuilding

SUGAR co-founder Vineeta Singh has acknowledged the significant gap between the company’s current valuation and its 2022 peak.

Her comments around the latest funding have emphasised the company’s focus on rebuilding and the importance of supporting the team working on the ground.

The message reflects the broader transition underway at SUGAR – from a period of aggressive expansion towards a more measured approach centred on business fundamentals.

What comes next for SUGAR Cosmetics

The ₹144.5 crore investment gives SUGAR additional resources at an important point in its journey.

The company now has an opportunity to refine its portfolio, strengthen operations, improve financial performance and reconnect with consumers while leveraging the distribution infrastructure it has already built.

For A91 Partners, the decision to provide additional primary capital represents continued involvement in the brand as it enters this next phase.

The success of the investment will ultimately depend on SUGAR’s ability to convert fresh capital into stronger products, healthier unit economics and renewed consumer growth.

The latest round may therefore represent more than a funding event – it marks a reset for SUGAR Cosmetics as it looks to build a more sustainable version of the business that first emerged as one of India’s prominent D2C beauty brands.