WOMAN / ENTREPRENEUR SPECIAL ....Falguni Nayar

WOMAN ENTREPRENEUR Falguni Nayar

 `For any business, the first year is a honeymoon period'





Falguni Nayar left an 18-year career as an investment banker to be an entrepre neur. She founded Nykaa in 2012, an e-commerce platform for beauty products. Nayar, 54, put her own money into the business first and then raised Rs 185 crore from domestic high net-worth individuals. Nykaa has now taken the offline route, and opened stores across the country . It recorded revenue of Rs 214 crore last fiscal, and Nayar says she is aiming to make it profitable by the end of the calendar year.

How has your company grown over four years?

In four years, we have become the largest retailer in the beauty segment, and brands are keen to launch on our platform as they make Rs 2 to Rs 3 crore a month here. Beauty is a sunrise segment in India and has huge potential for growth. We decided on beauty because I wanted to start in a nascent sector and grow rather than compete with big companies. We have gathered momentum and improved digital marketing. As an investment banker, I was conscious about financial metrics.

Why have you chosen to open offline stores?

Consumers want an omnichannel experience, and sometimes people want to try before they buy. We have five stores, and will open five more in the next few months and reach 30 by 2020. Stores help us in education, building a community through events and leveraging online data to stock products that sell more in a region. We are operationally positive in the stores.

Since you don't come from a tech background, did you struggle to understand the processes?

I worked closely with my tech team. I'd tell them what I liked and didn't like, and they'd tell us what they could do. That's why our site looks different. We have 450 people, an office in Delhi and warehouses in Mumbai, Delhi and Bengaluru.

How easy or difficult was the transition from investment banker to entrepreneur?

It is completely different but I did it pretty easily. For an ecommerce business to run successfully , we can't allow even one order to lie in the warehouse. We sell 1.2 million stock keeping units every month. It's like a welloiled machine and needs a lot of execution. We worked from my house for three to four months when we started.For any business, the first year is a honeymoon period.It's easy because you are just designing. The next year, when business started scaling up, the person heading operations couldn't cope with 30 orders a day and quit. We had to learn how to dispatch packages and set up an enterprise resource planning system. We shut operations to dispatch orders. Those days were a nightmare with many customer complaints. It was a 25-person office. Today, we do 13,000 orders a day .

How did the initial funding, and your connections in the investment banking world help?

The company ran on family funds for two years because I didn't want to raise money . I wanted to make the metrics happen. We had good momentum by the time I went to investors. We had access, since my husband and I were both bankers. We are 95% inventory led. I wanted to be inventory led and complaint so we couldn't take foreign funds.

So we turned to domestic high net-worth individuals.

Being a banker, I knew VC funds come as conditional funding; it's not really equity.

If you don't do well, it's debt. I wanted pure equity. We have raised Rs 185 crore over three rounds with 20 unique investors. We'll list the company.

Anand J & Shalina Pillai

TNN