Mamaearth parent grabs top spot in Hurun’s PE-backed start-ups list

The parent company of personal care brand Mamaearth, Honasa Consumer Pvt Ltd, has grabbed the top spot in a list of best-performing companies that were backed by private equity (PE) funds in the financial year 2020-21.

The first edition of the Practus Hurun India PE Performers 2022 highlights companies that have shown remarkable growth in financial performance as well as investors who backed them.

Honasa Consumer, which has recorded a ₹100-crore turnover in four years, leads the top-10 list, with an average growth of 491% over the previous year.

Ravishankar G.V.-led Sequoia Capital and Yana Kachurina-led Sofina Ventures are the major investors in the six-year-old company. Honasa's year-on-year EBITDA growth for FY21 was 641%.

Encube Ethicals, an integrated pharmaceutical company dedicated only to topical formulations, recorded 343% growth and is ranked second on the list. Encube reported a 183% increase in EBITDA in FY21 over the previous fiscal.

Encube, which is in the portfolio of Quadria Capital led by Amit Varma, makes both prescription-only and over-the-counter skin care products.

Ecom Express, a tech-enabled logistics solutions provider, is ranked third, with a growth of 283%. CDC Group led by Srini Nagarajan and Partners Group led by Manas Tandon have invested in the start-up, which reported an EBITDA growth of 157% in FY21.

In fourth place, with 224% growth, comes Desiderata Impact Ventures (Progcap). Key investors like Tiger Global Management, Sequoia, and Creation Investments Capital Management are backing the start-up. This Delhi-based fintech provides debt to small and micro businesses in smaller cities and towns.

The Practus Hurun list ranks Acme Formulation, in fifth place, with 172% growth. The company reported an EBITDA growth of 235% for FY21.

Having invested in four companies in the Practus Hurun list, including two unicorns, Sequoia Capital India, which is led by Ravishankar G.V., ranks in the top spot among PE investors. Norwest Venture Partners, led by Niren Shah and Tiger Global Management, led by Alex Cook take the second spot, with investments in 3 companies each.

The list has been compiled and ranked based on six factors -- investee should be based in India; the company should have received at least $25 mn investment during a single round; a single investor must have invested at least $10 mn in a round; the company should have reported revenue, EBITDA and operating cash flow growth in FY21.

Of the 125 companies in India that received single-round funding of more than $25 million in the calendar year (CY) 2021, Hurun shortlisted 21 companies that fit the performance and funding criteria.

Meanwhile, the companies ranked between 6th and 10th place are Bigfoot Retail Solutions (KartRocket.com/ShipRocket) (161% growth), Clean Max Enviro Energy Solutions (149% growth), Zerwerk Manufacturing Businesses (Zetwerk) (81%), OFB Tech (OfBusiness) (59%) and Five Star Business Finance (53%).

Of the 103 investors who took part in investments across various funding rounds, Hurun found 35 PE investors that have invested in companies featured in the list.

Deepak Narayanan, CEO & founder, Practus says over the last decade, private equity and venture capital investments in Indian companies have seen a significant upsurge and scaled an all-time high of $70 billion in 2021, an increase of 96% over the 2020 deal value, excluding the Reliance retail and Jio deals.

"In addition, the number of deals almost doubled from 1,100 to 2,000, record listing of new age businesses (Zomato, Paytm, Nykaa) and a significant increase in exit momentum ($36 mn) with attractive valuation multiples,” he adds.

Anas Rahman Junaid, MD and chief researcher of Hurun India, says private equity funds, along with their managers, are one such catalyst that could accelerate value creation in the Indian economy.

Meanwhile, Japan-based Softbank, led by Sumer Juneja, gave the largest single round cheque worth $196 mn to OfBusines, a company among the top 10 in the Practus Hurun list.