IPO is just graduation, must work on long-term view: Nykaa founder

The feeling is the same as it was at the beginning of the journey and as we went on roadshows with investors, said founder Falguni Nayar

FSN E-commerce Ventures, the parent of Nykaa, didn’t just manage to provide stellar returns to investors and founders with its listing-day gains, but has also showcased the power of women entrepreneurs. Founder Falguni Nayar, however, has no time for a breather as she is busy with preparation of the firm’s results that will be announced next week. In an interview she talks to Shivani Shinde about the initial public offering (IPO), role of Indian high networth individuals (HNIs) and the age-old debate on professional and promoter-run companies. Edited excerpts:

How has life changed after the bumper listing?

The feeling is the same as it was at the beginning of the journey and as we went on roadshows with investors. The past couple of months have been a great journey. We met close to 120 high-quality and long-term investors. I think we are much more confident about the strategy and the company. The strong support the listing has received is the culmination of our belief in our story. I think the IPO and the performance of the stock show the interest and love that we got. The effort that investors have put into understanding our business is really amazing.

What’s the way ahead? Has the goalpost changed?

I have always likened an IPO to a graduation. Life begins after that graduation as you enter the real world. From tomorrow, we’ll have to be far more responsible. I think once you’re public (listing), you have to be more accountable, and now there are thousands of investors who are part of our family. You kind of grew up and you feel that, yes, the capital allocation has been done, but now we have to work towards a long-term view, take advantage of this tremendous opportunity of convergence of technology.

There is always a debate on which is best — promoter-driven or professionally-managed firms. With your children taking an active role, what is your view?

I would say why are you saying it’s a family-run business. It’s not. Nobody’s coming into the business because they are a part of the family. They are qualified in terms of educational background, the work they are putting into. So, I don’t see it as a choice between family and professionals. I think it’s more about doing the right thing in terms of building the company. From the time we started this the children could be a part of this journey.

But remember, we are running a large business and there are different roles, so I do not see family and professionals as a divide. There are roles as far as management is concerned and building this company and family members can be part of the management team, and share responsibility. And, yes, my family and I do have ownership and this will probably pass on to our children.

What’s your take on the future of Internet-led businesses in India?

When we were raising money, I didn’t seek external capital. I wanted to be invested and delayed any fundraise. When we began, we could not be a foreign-owned company. So, we started with our own capital and that’s why we saw more interest from HNIs and family offices. We did not raise money for the first two years. Our first fundraise was in 2014. It was only after restructuring as an Indian managed company that we raised foreign money and that also in such a manner that we did not give any role or give up too much control or have investors who imposed conditions. We have always raised Indian capital. 

Now, to the current situation of funds chasing businesses. A lot of capital is available for the start-up ecosystem. It emphasizes the growth of the ecosystem. If you have the enthusiasm and energy and an idea then today funding is not a challenge. But, again, raising funds is not the end, execution is important. I think at an early stage, one should look at investors who can support you and believe in your idea. 

What will the focus be going ahead?

I have always said that Nykaa is a multi-brand retailer first and, yes, we will continue to build brands as well. Between beauty and fashion, we have 3,600 brands. We are expanding into brands as well as other categories. In terms of international expansion, we are starting with West Asia and then maybe Europe. We do realise it is time to have a larger ambition. 

Have you ever thought of an exit plan?

I have said several times publicly that I will not want to sell the company. I want to own it and let it be part of the family. It is a source of excitement for me and we love to do what we are doing. I think it gives a sense of purpose. Besides, I still have a lot of energy and ideas to take Nykaa ahead. 

What is your message to other founders, especially for women?

 I would always joke that work cannot be the last stand. For women, family and children are always up in terms of priority. 

But, I think your professional choices should also get a slightly higher priority. Our priorities need to be reasonably balanced. I think women also have the right to pursue their dreams, and should not be afraid to dream.