mCaffeine’s parent aims to raise $50-70 mn

New Delhi/Mumbai: Pep Technologies Pvt. Ltd, which owns mCaffeine and Hyphen brands of personal-care products, is looking to enlist investment banks to arrange its next fundraise, which is likely to see a few early-stage investors exit the Mumbai-based company.

Pep Technologies aims to raise anywhere between $50 million and $70 million over the next 12 months, and will use the funds to power overseas expansion and grow its newly-launched clean beauty brand Hyphen, according to several people familiar with the development.

Homegrown financial services firm Avendus Capital is in the fray to lead the mandate, along with another large global bank, the people cited above told Mint, requesting anonymity.

“Early investors may look for an exit this year, and the company is planning to raise anywhere between $50 million and $70 million in 2024. It will be a mix of primary plus secondary fundings, though the majority of it will be secondary. The funds will be used to grow its brand Hyphen,” said a person familiar with the development. Some of the funds may seek a partial or full exit depending on the valuation, a second person said.

Tarun Sharma, co-founder and CEO, mCaffeine, said the company is “exploring market opportunities”, but remains well-capitalized for the next 18 months.

“Also, there is a possibility that one of our early investors may consider an exit soon,” Sharma told Mint.

“With respect to future plans, moving forward, our goal is a ₹1,000 crore consumer sales milestone by 2025. We are also targeting a nearly 50% sales increase by FY24, with a commitment to profitability by FY25. In any case, the upcoming round will align with expansion plans domestically and internationally, targeting a strong presence in the GCC (Gulf Cooperation Council) or US markets after 6-7 months. Additionally, there will be a focus on scaling our other brand Hyphen, exploring additional categories for the same, and introducing new brands,” he said.

Last year, mCaffeine joined hands with actor Kriti Sanon to launch Hyphen that sells skin care creams, serums and sunscreens, among other products. The company could pump an estimated ₹30 crore into scaling brand Hyphen.

In March 2022, Pep Technologies raised ₹240 crore in a Series C financing round, led by Paragon Partners with participation from Singularity Growth Opportunities Fund, Sharrp Ventures and existing investors Amicus Capital Partners and RPSG Capital Ventures. It had then valued the direct-to-consumer goods startup at ₹1,000 crore.

In September 2020, it had raised ₹42 crore in a Series B led by Amicus Capital Partners.

As of March 2022, Pep Technologies had raised a total of $40 million across three funding rounds.

In FY23, the company’s revenue from operations stood at ₹205 crore up from ₹135 crore in the year ago period, with its loss widening to ₹91 crore from ₹57 crore a year earlier, according to data sourced from business intelligence platform Tofler. The brand was launched in 2016, by Tarun Sharma, Vikas Lachhwani, Vaishali Gupta, Mohit Jain and Saurabh Singhal.