Built to soar high: The flight path of a unicorn


15 Jan 2022



VS Kannan Sitaram

Built to soar high: The flight path of a <span>unicorn</span>
Fireside was the first fund to invest in Mamaearth, way back in 2017, and we’ve had the privilege of seeing this highly-focused personal care brand emerge as 2022’s first unicorn. Whether you’re an investor or an entrepreneur, there’s much to understand from Mamaearth’s success and we at Fireside thought it may be interesting to reflect on what it takes to create a large, thriving business in five short years.

When Varun and Ghazal started sharing with us their plan to build a brand offering toxin-free baby products, we could clearly see the opportunity that they saw, and were very excited. After all, the big brands were resting on their oars while new parents were coping with bringing up their babies sans the infrastructure of an extended family. These parents were very concerned about some of the ingredients that were being used in baby care products in India – they were searching for safe products for their infants, talking to each other online, and Googling their way through new parenthood – and Mamaearth became their closest ally.

The brand’s initial success rested on a combination of things. Ghazal engaged with, and built a community of moms who “owned” the brand. It was their feedback that helped her shape great, innovative products that moms loved. Mamaearth has always consulted this community, to discover what problems they wanted solved, to find out their feedback on new products, to get their views on packaging, and more. Varun built great relationships with online platforms like Amazon, a relationship built on the shared goal of solving consumer problems, providing greater choice, and great content, so the brand could reach more and more millennial parents. Soon, many Mamaearth products became Best Sellers on Amazon. At the same time, the company developed strong equity with manufacturers, who would supply them with products in smaller lots, so they could test and refine. Step by step, the baby care business was built, and moms across India started talking about this very friendly brand, which truly understood what their challenges in bringing up babies were, and came back with innovative solutions.

Let’s call this Phase I.

The next big leap came when Mamaearth was able to successfully leverage its equity in toxin-free baby products to offer adult consumers an interesting range of nature-inspired personal care. Smartly, Ghazal and Varun chose to enter via categories in which the big personal care companies did not play – hair masks, face masks, scrubs, body butters, etc. Only once they had built a loyal franchise did they go after the bigger categories like shampoos, hair oils, moisturisers, and face washes.

While the brand widened its offerings, an organisation was being built to support this growth. Initially, the founders hesitated to hire senior people, concerned about the higher payroll impact. They made their first senior hire in 2018, and I can remember Varun walking into a board meeting in 2019 and confessing to the board that he should have started doing this a year back! Soon, Ghazal and Varun were building multiple organisational pillars, and choosing to work with some of the finest, most experienced people in the field.

First came the e-commerce pillar, then the website, and then the offline business. Marketing followed soon, to work with influencers, and nurture the community. Soon after, they had senior appointments for supply chain management, finance, HR, and most recently, technology. Building out these individual pillars fuelled the growth of the Mamaearth brand. It soon found pride of place on other marketplaces, like Nykaa and Flipkart. And because the organisation was built to keep scaling, scale it did.

This was a virtuous cycle. More people wanted to be part of this trailblazing brand, and the brand was able to attract and empower top-tier talent to power them to the next level. This also freed up the founders’ bandwidth to do more with their vision. However, attracting talent is only half the story; retaining it is the other half. Varun once shared with me that the company had 33 different initiatives to build its distinct organisational culture, and to be a high-performing team. Talk of building a strong employer brand!

That was Phase II.

I have always admired how they have built this strong organisation without losing an ounce of entrepreneurship, of intelligent risk-taking. So while the brand has management leadership, and has invested heavily in business processes, it is also nimble and dynamic, focused on new opportunities. Here is one example of the entrepreneurial streak that seizes an opportunity when it presents itself. In 2020, when Covid hit, everyone was struggling to find their feet. Advertisers were hesitant, as were marketers. Quite naturally, media costs dropped. As soon as the lockdown lifted, Mamaearth went all out on their marketing, while most others were curtailing spends. The brand got twice the bang for its buck, sales jumped bigtime, and the brand became a household name, being referred to in the same breath as L’Oréal, or Dove.

This Phase III continues. Mamaearth still launches 15-odd new products every quarter. The brand is already international, and is in Bangladesh and the Middle East. Honasa is a house of brands, including Mamaearth, The Derma Co, Aqualogica, and now, Ayuga. They have developed proprietary technology, for consumer listening, and for measuring influencer impact. Their success has only whetted their ambition to grow.

What next for Ghazal and Varun? Well, there are the new brands they have launched. Leveraging the content platform, Momspresso, that they recently invested in. Exploring new categories for Mamaearth – they have entered colour cosmetics with a highly successful kajal pencil, and just launched tinted lip balms. And while the brand is already international, the latest funding round seeks to leverage the unique strengths of Sequoia, Sofina, and Evolvence in the US, Europe, and GCC.

The journey of Mamaearth is a masterclass in building for scale – from PMF, to building organisational ways of scaling, without losing the entrepreneurial spirit. Perhaps Varun said it best in his announcement of the recent fund raise, when he said that what changes is: “We will be braver, faster, stronger and take a new flight into the next 5 years of our journey with wings on our back.” Here’s wishing you strong wings so you may soar even higher!

It’s also a vindication, in no uncertain terms, of what we, at Fireside, set out to prove in 2017— that in India, we can build large, digitally native brands, which are highly capital- efficient, by partnering entrepreneurs who dare to think big. We continue to look for (and find) such entrepreneurs. So, if you are solving a big consumer problem and have early evidence of success, please do reach out to us at contact@firesideventures.com


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