FAE Beauty on Shark Tank India: Inclusive Beauty Meets Strategic Growth

FAE Beauty, Founded in November 2018, FAE Beauty (Free and Equal) is a Mumbai-based beauty brand breaking the mold of conventional cosmetics. While most brands cater primarily to fair skin tones, FAE Beauty aims to embrace diversity with products for all skin tones, textures, and genders. This bold mission reflects in their vegan, cruelty-free formulations that appeal to a wide audience across India.

Karishma Kewalramani, the founder of FAE Beauty, identified a critical gap in the Indian beauty industry. With 74% of Indian women falling under the brown to dark brown skin tone spectrum, she felt that inclusivity in beauty was long overdue. Her mission has resonated with over 3 lakh customers since the brand’s inception, proving that representation matters.

Click here to visit their official website: FAE Beauty

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Operating in the competitive e-commerce landscape, FAE Beauty started with modest beginnings. Initially bootstrapped, the company expanded its visibility through social media campaigns and collaborations with influencers. By 2022, their product portfolio boasted 50+ offerings, available through their website, marketplaces, and quick-commerce platforms.

The brand’s flagship product, the Lip Whip, quickly became a customer favorite, representing the company’s dedication to quality and innovation.

While FAE Beauty’s inclusive mission struck a chord with customers, building a profitable business was challenging. Here’s a detailed look at their financial trajectory:

• FY20-21: Revenue stood at ₹30 Lakhs at a loss of ₹80 Lakhs.
• FY21-22: Revenue grew to ₹70 Lakhs, but losses increased to ₹1.5 Crores.

• FY22-23: Revenue hit ₹3.3 Crores, though losses still amounted to ₹2.5 Crores.
• FY23-24: Revenue grew to ₹7 Crores, with reduced losses of ₹80 Lakhs.

In FY24-25, FAE Beauty expects to turn a profit for the first time. As of October 2024, they achieved ₹10 Crores in revenue and ₹1.25 Crores in profit. By year-end, the founder is projected for ₹22 Crores in net revenue, showcasing a remarkable turnaround driven by strategic adjustments.

FAE Beauty’s growth has been fueled by multiple funding rounds. Here’s a breakdown of their fundraising journey:

• FY20-21: Raised ₹1.5 Crores at a ₹6 Crore valuation.
• FY21-22: Secured ₹2.4 Crores, boosting valuation to ₹26 Crores.
• FY23-24: Raised ₹2 Crores at a ₹32 Crore valuation. Followed by another at ₹22 Crores, raising ₹3 Crores.

Prominent investors include Titan Capital and angel investors. Notably, Arihant Patni, an early investor

• Karishma Kewalramani retains 38% ownership.
• ESOP Pool accounts for 10.3%.
• Arihant Patni owns 26%.
• Titan Capital owns 13.5%.
• Shiprocket owns 1.6%.
• Remaining shares are held by her family and other investors.

Every startup faces roadblocks, and for FAE Beauty, balancing innovation with financial sustainability has been key. Initially, 35% of their net revenue went to marketing, while only 5% was allocated to research and development. To reverse losses, Karishma streamlined operations, focusing on their best-sellers like the Lip Whip.

• Cost of Goods Sold (COGS): 25% of net revenue.
• Logistics and Gateway Commissions: 10%.
• Marketing: 35%.
• Overheads: 18%.
• Profitability: 12% EBITDA.

The brand’s entry into quick commerce proved to be a game-changer, contributing 25% to overall revenue within just 3 months.

FAE Beauty’s pitch on Shark Tank India Season 4 highlighted their inclusive mission and growth potential. The founder sought ₹1 Crore for 1% equity, valuing the company at ₹100 Crores.

Initial Offers:

• Aman Gupta offered ₹1 Crore for 3%.
• Anupam Mittal matched this but later revised his bid to ₹1.25 Crores for 3%.
• Peyush Bansal proposed ₹1 Crore for 3%.

Final Deal:

After counteroffers, Karishma accepted ₹1 Crore for 1.5% equity, closing the deal with Aman Gupta and Namita Thapar at a valuation of ₹66.67 Crores.

With ₹10 Crores in revenue by October 2024 and profitability in sight, FAE Beauty is poised for exponential growth. Their focus on hero products and efficient spending will be instrumental in scaling operations without compromising quality.

• Expanding product lines tailored to diverse Indian demographics.
• Strengthening their presence in quick commerce.
• Exploring international markets for wider reach.

FAE Beauty’s journey showcases inclusivity and resilience. By addressing an underserved market, Karishma Kewalramani has not only built a successful brand but also challenged traditional beauty norms. As they continue to grow, FAE Beauty’s impact on the Indian beauty industry is bound to inspire future innovators.