Making science mane-line: Introducing Iluvia


03 May 2024



Prayag Mohanty & Aashish Mirchandani

Making science mane-line: Introducing Iluvia

Hair straightening. Keratin treatments. Hair spas. A beauty salon is now so much more than a place you go to for a haircut. The 6-7 million salon market in India is currently valued at INR 20,000 Cr., and is expected to grow at a steady 18-20% CAGR to reach INR 35,000 Cr. by 2025.

Iluvia, co-founded by Palash Pandey and Nishant Gupta, is set to disrupt this space through highly differentiated, patent-led, science-backed products created through their robust in-house innovation engine.

It all started when Palash and Nishant were students at Vellore Institute of Technology (VIT). Their batchmates, who had moved to Vellore from different parts of India, kept complaining about the quality of the water – and how it caused their hair to thin, fall, and turn prematurely grey. Problem solvers by nature, Palash and Nishant began to solve for the hard water in Vellore – and that path led them to start Iluvia as soon as they graduated in 2015.

The background

With the Indian economy projected to be amongst the world’s fastest-growing, the beauty and personal care sector is poised to grow on the back of rising per capita income, and growing beauty consciousness amongst consumers. Haircare accounts for the largest – a whopping 30% – share of the overall personal care market, and the salon space has been a particularly buzzy one in recent years.

Indian brands like Lakmé, Enrich, Juice, Jawed Habib, and Naturals, have been expanding their reach, as have international players like Truefitt & Hill, Toni & Guy, and Jean-Claude Biguine. Nykaa has partnered with Estée Lauder’s Aveda to launch a co-branded salon.

The opportunity

We believe that the opportunity for science-led solutions in haircare is multifold.

  1. A large number of Indian consumers are fascinated with the “straight hair’ look, making the route to this – keratin, hair botox, cysteine, straightening, smoothening, etc. – the most popular in-salon treatments. The problem? While immensely popular, the majority of these treatments release formaldehyde, a proven carcinogen, during the straightening process. Some of these also contain “hidden” formaldehyde, where it may not be on the ingredient list, but is a byproduct of the process. This is dangerous for the customer, and severely dangerous to the stylist, who breathes in these fumes on a regular basis. To understand the scale of the problem, you must know that keratin treatments regularly use up to 50 times the “safe” concentration of formaldehyde. Known to cause nose bleeds, fainting, headaches, and other side effects, formaldehyde is banned in the EU as well as some states of the US.

  2. The safety hazards do not belong to keratin treatments alone. Take anti-dandruff shampoos, for example. Across the world, international brands are discontinuing or recalling these products for their inclusion of another carcinogenic ingredient, zinc pyrithione.

  3. Rapid urbanisation and reliance on ground water supply has led to the unavailability of “soft” water in many Indian cities. There simply isn’t a shampoo that lathers and cleans well in such an environment.

These are just some of the white spaces in haircare that could support a large, premium, solution-oriented brand like Iluvia.

The solution

It took a pair of chemical engineers to develop and launch a solution to these multiple problems. Iluvia’s hard water shampoo and conditioner are its best-selling products today. The brand has developed the equivalent of a keratin treatment that straightens hair without releasing formaldehyde. Additionally, it takes half the application time, and releases no fumes at all. Iluvia has also developed an anti-dandruff shampoo without zinc pyrithione, that is just as efficacious in restoring scalp health.

Iluvia has built an innovation engine that continually churns out efficacious, science-backed solutions for haircare concerns. These unique, patented solutions, quite naturally, are expensive to make. This has led the brand to take the salon route to market, as the salon owner or stylist is a trusted influencer, and the salon environment is conducive to a higher price point for haircare products.

The consumer

Millennials and Gen Z consumers are also very concerned about the health and safety factor of the products and services they use. They seek specific, more evolved hair care solutions like “anti-dandruff shampoo,” “sulphate free,” and “paraben free.” This growing consciousness among consumers enables a premium, innovative offering.

These consumers are also aware of high-efficacy products, having witnessed the global success of brands like Olaplex, K18, and Augustinus Bader.

The moat

It isn’t often that you come across a pure innovation play in the BPC space. Marketers often say that in BPC, the brand is the moat. The Iluvia approach to brand-building is radically different as it significantly leverages strong product differentiation.

Iluvia solves problems through patented, unique solutions. Their existing product range is so innovative that it has literally no direct competition. In addition, their robust new product development engine has enabled a strong pipeline of products – further cementing the brand promise of innovation. The salon-led GTM strategy has enabled Iluvia to win the trust of leading salons, as well as their customers, while keeping repeat purchase high.

The Iluvia moat is three-pronged: R&D-focused founders, building a haircare innovation engine, and providing solutions which are global in their appeal.

At Fireside Ventures, we’ve been watching the salon-led professional beauty trend quite closely. We’ve also written about it earlier. We believe that science can disrupt a traditionally oligopolistic market, and there are several examples of large international brands being built on this foundation.

With Iluvia, we have a couple of engineering students turn entrepreneurs on campus, and stay committed to that path almost a decade later. We’re thrilled to back Palash and Nishant, and be a part of their disruptive journey to build the next Olaplex from India.

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