Sequoia Capital acquires Faces Cosmetics in a $40 million deal

Sequoia Capital, the US venture capital firm, has acquired a leading personal care, makeup and skincare company Faces Cosmetics Canada from Everstone Capital for $40 million. The cosmetics startup has emerged as one of the top cosmetics and skincare brands in the country, competing in a market dominated by the likes of Hindustan Unilever-owned Lakme and L’Oreal, the world’s largest cosmetics company. It also competes with other global players such as Maybelline, Revlon and Color Bar.

The startup plans to increase its store-in-store outlets from 900 to around 1,200 by the end of 2022. Additionally, over the next one year, it expects to expand to 100 cities from about 80 at present. In FY17, the company clocked INR100 crore in sales. Abhay Pandey, Managing Director of Sequoia Capital, said that “The color cosmetics market is the fastest-growing category in personal care and we see a huge opportunity for the Faces brand. The Sequoia team will work with the Faces management to make significant investments and deploy operational expertise to unlock the brand’s full potential as well as expand its portfolio and reach”.

The highly-fragmented beauty and wellness market in India has attracted only limited interest from large PE funds, although the sector has seen several investments by venture capital investors in the past five years. The size of India’s beauty, cosmetic and grooming market is expected to touch $20 billion by 2025 from the current level of $6.5 billion.