ETtechBengaluru: The Bombay Shaving Company, which has positioned itself away from a men’s grooming firm to a hair removal brand, has raised Rs 160 crore in a Series C funding round led by Malabar Investments, a hedge fund based in India.
Patni Advisors, Singularity AMC, and others also participated in the fundraising. It has also paved the way for exits and employee stock ownership plan (ESOP) sales worth Rs 45 crore for some of its employees and early investors, the company said in a statement.
The funding round comes 11 months after it raised Rs 45 crore from FMCG company Reckitt Benckiser. Colgate Palmolive is also a strategic investor in the company. Bombay Shaving Company will use the funds to expand its product line, offline distribution, build international presence, invest in brand building and hire talent across positions.
Online vs Offline
“From a business perspective, Covid-19 helped us,” said Deshpande. “A lot of shopping moved online. As a company, we are a lot more competitive online than offline.”
Bombay Shaving Company has expanded its product range and opened a separate portal for women’s products. Deshpande said that the business now constitutes 25% of its total and also has a separate CEO. The women's category will be primarily online, he said, while men’s products will be retailed offline as purchases of certain products like razors and shaving cream continue to be through brick and mortar stores.
While around 65% of Bombay Shaving Company’s business now comes from online platforms, Deshpande expects 60% of its revenue to come from offline channels as it scales to Rs 500 crore in the next two years. The firm, at present, is operating at an annual revenue run rate of Rs 150 crore.
Arpit Mathur, partner at management consulting firm Kearney, told ET in an interview last month that local brands in China disrupted established ones in the beauty category when large amounts of business went online. He expects a similar trend in India.
“The number of brands will expand,” said Mathur. “There will be traditional brands coming to online platforms as they realise that this is where the battleground is.”
Deshpande said his company is beyond just grooming. “We are a grab-and-go category. We have to be there in groceries, beauty and e-commerce,” he said.
Newer frontiers
Deshpande said that being an investee company of Colgate Palmolive and Reckitt Benckiser helps in offline expansion as the company gets to leverage on their respective distribution networks.
“I can go to a city like Indore and I know exactly which 300 stores I need to go to because of my relationship with Colgate and Reckitt,” he said. “The distributor will treat me differently because I am an investee of Colgate and Reckitt and not any other startup.”
Bombay Shaving Company also gets access to Colgate’s manufacturing supplies like tubes that store lotions and creams.
The company plans to expand to the United States, Europe, West Asia, and Australia.
“If you look at the countries we are expanding, hair removal is a very expensive process and the products don't exist for black hair on brown skin,” said Deshpande. “Middle East ethnicity is also similar. So, we are looking at countries with a large Indian diaspora or large population with similar ethnicity where Bombay Shaving Company already has a pull…”
Patni Advisors, Singularity AMC, and others also participated in the fundraising. It has also paved the way for exits and employee stock ownership plan (ESOP) sales worth Rs 45 crore for some of its employees and early investors, the company said in a statement.
The company is in advanced talks to raise a further Rs 300 crore in a round that’s expected to be closed by March this year, founder and Chief Executive Officer Shantanu Deshpande told ET in an interview. He expects the fundraise to be the last before the company’s planned initial public offering.
The funding round comes 11 months after it raised Rs 45 crore from FMCG company Reckitt Benckiser. Colgate Palmolive is also a strategic investor in the company. Bombay Shaving Company will use the funds to expand its product line, offline distribution, build international presence, invest in brand building and hire talent across positions.
Online vs Offline
“From a business perspective, Covid-19 helped us,” said Deshpande. “A lot of shopping moved online. As a company, we are a lot more competitive online than offline.”
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Bombay Shaving Company has expanded its product range and opened a separate portal for women’s products. Deshpande said that the business now constitutes 25% of its total and also has a separate CEO. The women's category will be primarily online, he said, while men’s products will be retailed offline as purchases of certain products like razors and shaving cream continue to be through brick and mortar stores.
While around 65% of Bombay Shaving Company’s business now comes from online platforms, Deshpande expects 60% of its revenue to come from offline channels as it scales to Rs 500 crore in the next two years. The firm, at present, is operating at an annual revenue run rate of Rs 150 crore.
Arpit Mathur, partner at management consulting firm Kearney, told ET in an interview last month that local brands in China disrupted established ones in the beauty category when large amounts of business went online. He expects a similar trend in India.
“The number of brands will expand,” said Mathur. “There will be traditional brands coming to online platforms as they realise that this is where the battleground is.”
Deshpande said his company is beyond just grooming. “We are a grab-and-go category. We have to be there in groceries, beauty and e-commerce,” he said.
Newer frontiers
Deshpande said that being an investee company of Colgate Palmolive and Reckitt Benckiser helps in offline expansion as the company gets to leverage on their respective distribution networks.
“I can go to a city like Indore and I know exactly which 300 stores I need to go to because of my relationship with Colgate and Reckitt,” he said. “The distributor will treat me differently because I am an investee of Colgate and Reckitt and not any other startup.”
Bombay Shaving Company also gets access to Colgate’s manufacturing supplies like tubes that store lotions and creams.
The company plans to expand to the United States, Europe, West Asia, and Australia.
“If you look at the countries we are expanding, hair removal is a very expensive process and the products don't exist for black hair on brown skin,” said Deshpande. “Middle East ethnicity is also similar. So, we are looking at countries with a large Indian diaspora or large population with similar ethnicity where Bombay Shaving Company already has a pull…”
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