Ayurveda start-up, The Ayurveda Company (T.A.C) aims to reach break-even in the last quarter of FY24 , Param Bhargava, co-founder, The Ayurveda Company, told BrandWagon Online, adding that company’s net revenue stood at Rs 40 crore. “From a profitability perspective for FY 24, we will not turn profitable but we expect that the last quarter should be in the vicinity of breakeven and we should be around minus 10% approximately on the EBITA,”Bhargava said. He however declined to comment on net loss. The company’s revenue from operations rose 20X to Rs 12.68 crore in FY22 from Rs 62.2 lakh in FY21, according to the regulatory filings accessed by business intelligence platform, Tofler. While its net loss increased to Rs 2.78 crore in FY22 from Rs 49.73 lakh in FY21.
Targetted at consumers in tier-2 cities, ayurvedic beauty and wellness brand, The Ayurveda Company (T.A.C) was incorporated in 2021. The company raised Rs 100 crore in the second round of funding in March 2023 from VC fund Sixth Sense Ventures, which includes 70% equity funding and 30% of venture debt. Moreover, the company has till date raised a total investment worth Rs 120 crore. “We are more focused on growing and building our presence in tier-2 markets. Tier-2 markets such as Chandigarh, Lucknow, Varanasi, among others are performing really well for us. But we have observed that in the last eight-nine months when we started spending more acquiring consumers, we were able to acquire more number of customers,” he explained.
The company claims that skincare products account for maximum, that is, 45% of the revenue. This is followed by haircare range which accounts for 25% of the sales. Hot on the heels is lipcare and bodycare which accounts for 20% of the revenue and lastly, health and wellness category accounts for 10%. As per Bhargava, the cost of customer acquisition (CAC) ranges between Rs 650-700 when it comes to its own direct-to-consumer platform that is its own website. He, however declined to comment on the CAC on other platforms such as offline stores.
The company further claims to spend 40% of its revenue on advertising and marketing, every year. This means in FY22 it had spent around Rs 5.04 crore in marketing and advertising. Interestingly, it claims that most of its ad-budget is spent on digital and within that influencer marketing. “We use different channels based on objectives. For example, one area where we spend is performance marketing which is typically to generate revenue from our own website. Then within digital we spent 10% of the ad-budget on influencer marketing. We have also started investing in above-the-line (ATL) media besides sponsorship,” he noted.
The company claims to have 20 kiosks across malls in 13 cities of 70-80 square feet, one exclusive brand outlet (EBO) in Indore and 5,000 other point-of-sales. Furthermore, its products are sold on its own D2C channel besides other e-commerce platforms such as amazon, snapdeal, nykaa, among others and retail outlets. The company, which claims to follow an omni-channel strategy, claims that offline accounts for 55% of the revenue while D2C and e-commerce channels together account for the rest 45%. “Most of our catalogue fits in within the price bracket of Rs 200-500. However, an average selling price per product for us is close to Rs 250-299 and average order across for us is minimum two products which comprises approximately Rs 500,” Bhargava said.