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Friday, October 30, 2020

Goldman Sachs buys out Purplle’s angel investor shares at 40X premium

Angel investors Abhinav Sinha and Anirudha Gopalakrishnan who are former Fidelity Investments executives invested Rs 25 lakhs and Rs 20 lakhs respectively when Purplle was launched in December 2011

Two early angel investors in online beauty and makeup products retailer Purplle have secured a 40X return on their angel investment over a nine-year period, after both investors offloaded their shareholding to Goldman Sachs in a secondary exit deal, said two people aware of the development.

Angel investors Abhinav Sinha and Anirudha Gopalakrishnan who are former Fidelity Investments executives invested Rs 25 lakhs and Rs 20 lakhs respectively when Purplle was launched in December 2011, said the first person mentioned above requesting anonymity.

Sinha made Rs 10 crore after selling his shares to Goldman Sachs, while Gopalakrishnan secured Rs 8 crore on his secondary exit, the person mentioned above said. Apart from secondary exits to angels, a dozen employees at Purplle redeemed their ESOPs in June for a combined value of Rs 18.5 crore, the person added.

In December 2019, Purplle raised $30 million in its Series C funding from Goldman Sachs in, which primarily provided large exits to angel investors. While Verlinvest’s $8 million additional funding in January 2020 funded ESOP redemptions, said the source mentioned above.

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Founded by Rahul Dash and Manish Taneja, Purplle sells makeup products and fashion accessories, as well as wellness products for men and women on its website. Purplle’s existing investors include Blume Ventures, IvyCap Ventures and JSW Ventures.

Confirming the development, the startup’s co-founder Taneja said that the e-commerce portal achieved total sales worth $50 million in gross merchandise value (GMV) in 2019, and that it’s targeting to achieve GMV sales worth $85-100 million by the end of 2020.

“In FY19 we broke even in May 2018 at EBITDA level. Since then we have been funding the company largely at internal accruals,” added Taneja.

Purplle currently works with around 800 beauty and personal care brands, sourcing products directly from them. Taneja said that the startup plans to add a total of 1400 brands by the end of 2020. The platform also stocks around 40,000 stock keeping units (SKUs), which is also expected to go up to 60,000 to 70,000 by the end of this year, according to Taneja.

He added that during the lockdown, Purplle’s share of sales from metro cities dropped to just 15%, while shares of sales from tier-II and tier-III towns increased to almost 70% in the last three months.

Purplle’s story further signifies that niche e-commerce platforms have a larger market for investors in India. Nice e-commerce platforms exist in various categories including beauty, cosmetics, personal care, furniture, pet foods, and others.

Besides selling renowned brands, Purplle also has its own private label, along the lines of its rival, Nykaa. It also provides makeup content and guided videos from bloggers. Purplle competes directly and indirectly with Nykaa, which was founded by veteran investment banker Falguni Nayar.

SourceLive Mint
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