Existing investors Stellaris Venture Partners and consumer-focused fund Fireside Ventures, are also expected to participate at a post-money valuation of about $70 million, said the first of the two people, both of whom spoke on the condition of anonymity.
While Fireside declined to comment, Sequoia, Stellaris and the company didn’t respond to emails seeking comment.
Founded in 2016 by husband-wife duo Varun and Ghazal Alagh, Mamaearth, run by Honasa Consumer Pvt. Ltd, offers over 50 natural, toxin-free products, including bamboo-based baby wipes, lotions and face masks.
Mamaearth counts a number of prominent angels as investors, including Marico’s Rishabh Mariwala, who manages Sharrp Ventures; Snapdeal co-founders Kunal Bahl and Rohit Bansal; and actor and entrepreneur Shilpa Shetty Kundra. It raised $4 million led by Stellaris and Fireside in September last year, before which it had raised $1 million from Fireside in September 2017.
The company has offline stores in Mumbai, New Delhi, Chennai, Pune, Kolkata and Nagpur. It sells its products on Amazon, Flipkart, Netmeds, 1MG and Firstcry, apart from its own website.
If the deal goes through, it would also mark Sequoia’s first investment in a consumer brand this year, having been a prolific backer of such brands, including Bira beer, Paper Boat beverages, Cafe Coffee Day and Raw Pressery, in the past.
Last year, V.T. Bharadwaj and Abhay Pandey, who oversaw consumer deals at Sequoia, left along with Gautam Mago, to set up their own fund, A91 Partners. Since then, Sequoia has inked only one consumer brand deal, investing ₹65 crore in mattresses and sleep-products firm Wakefit last December.
In the startup ecosystem, consumer investments have seen heavy traction from entrepreneurs and investors alike. Mint reported on 21 May that VC funds focused purely on the consumer segment are aggressively raising money from limited partners (LP, investors in VC funds), driven by the rise in new disruptive brands riding the consumption growth story.
At least three consumer-focused funds, including DSG Consumer Partners, A91 Partners and Fireside Ventures, are either closing, or are in the process of fund-raising in increasingly short intervals.
More recently, US-based investor Bessemer Venture Partners, known for its Indian bets on unicorns such as Swiggy and Bigbasket, led a ₹100-crore round in beauty and makeup products brand MyGlamm, Mint reported on 27 June. This also marked BVP’s first Indian deal in over a year.
The Mamaearth deal also indicates Sequoia’s continued interest in growth stage investments.
The firm is focusing on early stage investments from its own fund as well as Surge, a dedicated accelerator program for startups from India and South-East Asia.
This would mark Sequoia’s sixth growth stage deal this year.
The venture capital firm has backed mobile marketing startup CleverTap, gaming startup Mobile Premier League, digital therapeutics startup Biofourmis, online insurance platform Turtlemint and education firm Eruditus so far this year.