After nearly two years of muted deal-making, direct-to-consumer beauty sector is beginning to see a revival in venture capital interest, with a clutch of young brands raising fresh funding over the past few months. At least seven startups — including Moxie, Skininspired, Conscious Chemist, Fae Beauty, Krieya, Antinorm and Secret Alchemist — have closed funding rounds between November and January, signalling a cautious return of investor confidence.
Investors, however, say the rules of the game have shifted since the last funding boom. Capital is now flowing towards brands that demonstrate repeat-led growth, tighter cost controls and clearer paths to profitability, rather than those chasing scale through aggressive influencer-led marketing.
“There is definitely a meaningful resurgence in VC confidence in the D2C beauty category,” Archana Jahagirdar, founder and managing partner at Rukam Capital, which has backed brands such as Pilgrim, Fraganote and Antinorm, said. “This revival is driven not by hype, but by tangible improvements in market dynamics, consumer behaviour and operational maturity.”
Beauty remains an attractive category for investors due to its high repeat purchase behaviour and strong gross margins. But the emphasis has shifted towards building a balanced channel mix across online marketplaces, quick commerce, offline retail and community-led discovery, rather than relying heavily on digital performance marketing.
This transition is reflected in the financials of several fast-growing brands. Pilgrim and Foxtale, for instance, both doubled their revenues in FY25. Even as marketing efficiency improved, losses widened in absolute terms as companies continued to invest in brand building and distribution expansion.
Pilgrim’s operating revenue
Pilgrim’s operating revenue rose to Rs 408 crore in FY25 from Rs 198.7 crore a year earlier, aided by higher sales on quick commerce platforms. Its net loss, however, widened to Rs 68.7 crore from Rs 26.3 crore in FY24. Co-founder Anurag Kedia said marketing spend would continue to grow in absolute terms, even as it declines as a share of revenue. The company is increasingly allocating budgets towards brand-building and offline expansion, while using data-led tools to improve returns on marketing spends.
A similar shift is underway at Foxtale
The four-year-old skincare brand reported revenue of Rs 199 crore in FY25, up nearly two-fold from the previous year. At the same time, its cash burn declined from Rs 57 crore in FY25 to Rs 37 crore so far in FY26. Founder Romita Mazumdar said tier-2 and tier-3 cities now contribute close to 80% of revenues, up from around 60–65% earlier.
She added that marketing costs as a share of revenue have fallen by nearly 40%, while repeat purchase rates remain among the highest in the segment at about 50%. Average discounting has also eased, declining from roughly 25% in FY24 to about 15–16% currently. Foxtale is targeting revenue of Rs 400 crore in FY26.
Investors say these metrics reflect a maturing sector where growth is increasingly driven by operational discipline rather than cash-led expansion, making beauty one of the few consumer categories to regain venture capital interest in the current funding environment.
(With inputs from Urvi Malvania)