In 2016, Ghazal Alagh and her husband, Varun Alagh, established MamaEarth, a personal beauty care brand focused on environment-friendly beauty and personal hygiene products, specially designed for mothers and newborns.
In 2016, Ghazal Alagh and her husband, Varun, launched MamaEarth, and over the years turned their initial Rs 25 lakh investment into a major beauty care brand valued at Rs 15,000 crore. However, eight years later, Ghazal’s MamaEarth now lies in shambles as 50% of the company’s market cap was wiped out within a span of two months.
Here’s what happened and why MamaEarth is no longer a unicorn.
A startup earns the prestigious ‘unicorn’ tag when the company crosses the prestigious $1 billion valuation threshold, and MamaEarth has now lost that recognition after its parent company, Honasa Consumer Limited, lost 50 percent of its market cap in the last two months.
The company was valued at around Rs 15,000 crore in September, with its stock trading at a healthy Rs 541 per share. But things went awry as its stock eroded gradually, crashing to Rs. 227 in November, wiping out Rs 7,500 crore of the company’s market cap. Currently, MamaEarth is valued at less than $1 billion, thus losing the coveted ‘unicorn’ tag.
Mamaearth’s parent company has lost 50 percent of its market cap in the last two months. In September 2024, Honasa Consumer’s stock was trading at Rs. 541 a share, and the company was worth around Rs. 15,000 crore. But in November, just two months later, its stock has crashed to just Rs. 227 a share with a market cap of Rs. 7,300 crore. This represents an erosion of Rs. 7,500 crore of its market cap in two months. Simultaneously, Mamaearth is now worth less than $1 billion, and has lost its unicorn tag.
Interestingly, the biggest slump in MamaEarth’s shares came shortly after the firm declared its quarterly results last week, reporting a revenue of Rs. 417 crore in the September quarter, a 17% drop from its earnings of Rs. 498 crore in the previous quarter, and 10% lower than the revenue reported in the same quarter last year.
MamaEarth’s business had shown signs of stress even before the quarterly results were announced, with distributors flagging concerns over excessive, unsold and expired inventory from the company. Ghazal Alagh’s startup was one of the first to venture into the personal beauty sector, but its rapid success gave rise to rival companies, which started to compete with MamaEarth for market share, eventually taking a big chunk.
Additionally, the rise of quick commerce platforms have made Mamaearth’s rival brands to reach consumers with easy, thus further reducing the company market share.
Who is Ghazal Alagh
Born and raised in a middle-class household in Gurugram, Haryana, Ghazal Alagh completed her early education in her home state and later earned a Bachelors degree in computer application from Punjab University.
Following her graduation, Ghazal joined the New York Academy of Art where she completed her Summer Intensive Course in Design and Applied Arts and her Intensive Course in Figurative Art in Modern Art in 2013.
In 2016, Ghazal Alagh and her husband, Varun Alagh, established MamaEarth, a personal beauty care brand focused on environment-friendly beauty and personal hygiene products, specially designed for mothers and newborns. With an initial investment of Rs 25 lakh, the couple soon turned MamaEarth into one of top brands in the space, along the way becoming the first Asian brand to earn the MadeSafe label, making it a trustworthy brand for moms and infants.
The company soon grew into a unicorn, and as late as September 2024, had a valuation of Rs 15,000 crore.