- Ghazal and Varun Alagh want to be at the forefront of beauty and personal care opportunities in India.
- Mamaearth was born out of a need to provide toxin-free skincare options for their child.
- Both had to unlearn and relearn things from their previous experiences and pitch their vision to investors, vendors and potential employees alike.
- Ghazal says they should have communicated their stand on the IPO valuation process better.
- Both want to build Honasa over a multi-decade period, taking Indian skincare and beauty wisdom to the world. The journey is just beginning.
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Key Takeaways
- Ghazal and Varun Alagh want to be at the forefront of beauty and personal care opportunities in India.
- Mamaearth was born out of a need to provide toxin-free skincare options for their child.
- Both had to unlearn and relearn things from their previous experiences and pitch their vision to investors, vendors and potential employees alike.
- Ghazal says they should have communicated their stand on the IPO valuation process better.
- Both want to build Honasa over a multi-decade period, taking Indian skincare and beauty wisdom to the world. The journey is just beginning.
I grew up in an India that was still a few decades away from catching up with the skin care fad, that wasn’t aware of things like face wash and face cream. There was one soap and one cold cream. No shampoo, no hand and face and foot cream, nothing. But the desire to make your skin glow is not new. Women have figured out ways of doing that for centuries. For kajal (kohl), some used the carbon a ghee lamp would produce. It didn’t hurt your eyes. For skin care, there was always haldi (turmeric), malai (fresh cream), besan (gram flour), and gulab jal (rose water). These were the things my friends and I were using in our teens in our provincial city of Patna. Of course, soon the market became flooded with products and we began gravitating towards them. The lure of foreign brands is quite something. After the hype died down, I realised my skin was happier with my previous self-care method, which was just basic care, as our elders would suggest.
I was thinking about these things that came to us habitually once while talking to the Honasa founder duo Ghazal and Varun Alagh. Today’s India is longing to return to these routes, and Mamaearth has played a major role in reintroducing us to our heritage. It has taken all the ancient wisdom of Indian grandmothers and mothers that could have been lost with time and packaged it in bottles for all of India to use.
I have watched Mamaearth since the day it came into existence. I have seen it flourish and scale. What started as a small homegrown brand quickly became a unicorn and now is well on its way to becoming a publicly listed company in seven short years. The excitement around the IPO drove me to talk to the founders, who are partners in both work and life, about their brand built with love and passion.
During this exclusive interview with Shradha Sharma, Ghazal said something that moved me. “I don’t have two children, but three. Agastya, Ayaan, and Mamaearth. The company is my baby, too”. It’s something all founders say about their company, perhaps, but when Ghazal says it, it hits differently. This company, after all, was born for and with the couple’s first child. It is now growing with him.
Paranoid parents build a company
It’s been said enough times about these two, but it bears repeating. Varun and Ghazal Alagh’s story is that of love. A mother’s love for her child, and entrepreneurs’ love for ensuring that all parents can protect their children from harm. That is the role Mamaearth has taken on in the lives of Indian mothers, but I wanted to know where did this journey even begin?
“After getting married, I took some time off to pursue painting at the New York Academy of Arts,” recalls Ghazal. It was there that she first heard of beauty products being pulled off the shelves for including cancer-causing toxins in their formulations. For Ghazal, it was the beginning of her education about harmful chemicals present in skin and beauty care products. It was all the more horrifying because some of these products were on her beauty shelf as well.
Things changed when Ghazal returned to India and the couple had their first child. Very early on this journey, they realised they would not be easygoing parents. We know parents will move mountains for their children, but still, you don’t hear about them building companies for their kids every day. What exactly triggered this switch? What made this affable young pair give up their jobs, disrupt their daily lives and enter the risk-ridden world of entrepreneurship? Especially when there already was a newborn to care for?
“Suddenly, from a carefree, bungee-jumping kind of couple, we had become paranoid parents. Our jhapa (professionals who look after newborns and mothers in the initial phase) left us in two months because she said you’re always with the child, there is nothing for me to do,” she laughs.
But the paranoia was more than just the natural stress of being a first-time parent. The couple’s first son had very sensitive skin, and most baby products they tried in India did not suit him. So Ghazal and Varun would ask friends and family coming from overseas to get them specific brands that worked for their newborn’s skin.
Over a period, they realised it was neither feasible nor sustainable to rely on the generosity of their friends and family. The products were expensive, and would often expire by the time they found their way to Ghazal. “That was the trigger. We also discussed the lack of regulation on ingredients allowed in children’s skin formulations. At that time there was no conversation on regulation and safety for children’s products,” she adds.
Building from the ground up
Mamaearth is a name that rose to prominence from almost nowhere. But getting it to its perch now was a struggle for the founders, which includes, Varun says with a chuckle,
“Pitching the idea to an acquaintance in the middle of a morning jog”.
Varun had experience working in the FMCG sector, managing marketing, sales and brand. Ghazal was an artist. They had few savings and began with Rs 20 lakh. They raised some more capital from friends and family.
“When you leave your job and start a company, and meet a lot of businesses and vendors, your vision does not translate into passion for them,” says Varun.
In a rapidly changing India, people are used to ambitious and idealistic founders. They are used to dreams crashing, so they don’t always take things at face value. “Nobody takes you seriously initially. Early on, we learnt that you have to leave your ego at home if you want to run a business. You’ll have to beg, request, and be prepared to wait long hours for small meetings,” Ghazal adds.
And building a brand from scratch is as difficult as it sounds. But this time in FMCG must have given him a leg up? “Building a business is a very different animal,” he explains. It wasn’t just manufacturers and contractors or investors they had to convince, it was also potential employees. “We met so many people, even spoke to their parents, in order to convince them it was okay to join us. You have to pitch for everything,” he says.
Over time, they raised capital and built Honasa Consumer, Mamaearth’s parent company, into one that understands India. In early August, the markets regulator Securities and Exchange Board of India (Sebi) gave Honasa the go-ahead for its IPO. The company turned profitable in FY22 and today has six well-known brands under its umbrella — Mamaearth, Aqualogica, BBlunt, The Derma Co, Dr Sheth’s, Ayuga, and Momspresso.
They kept hitting milestones, mainly because Varun and Ghazal never gave up. “It may be clichéd, but all overnight successes are accompanied by hundreds of painful nights,” says Varun. It’s like winning a race at the Olympic games. “The medals aren’t won on the day of the race. But they are won because of the thousand days you woke up for the 5am practice and just ran,” he adds.
Battling perception
When Honasa filed its Draft Red Herring Prospectus with Sebi in December last year, several reports pegged the valuation of the firm at Rs 24,000 crore. It led to a huge debate online, with many people questioning the high valuation.
“We were told that there is a silent period after filing DRHP where you can’t talk or disclose numbers. We took it very seriously and didn’t respond to the rumours. That got read as our agreement with the reported number. That was our mistake and we own it,” explains Ghazal. The company eventually put out a clarification on social media distancing themselves from the number but that didn’t really help matters and that caused further pain. “We have built this brand with a lot of hard work and love, and these kinds of things really hurt,” she adds earnestly.
The couple’s focus on feedback and understanding the market has been relentless from the first day of building Mamaearth. From talking to 700-800 parents before creating the first few products to testing each of the products they launch in the market today, there is no compromise on quality, even as they battled public perception.
Looking ahead
With so many achievements already under their belt, how do the Alaghs plan to take the Honasa journey forward?
“IPO is just an event in this journey,” says Varun.
Taking the company public will mean access to more public market investors, giving people who love their products a chance to own fractions of the company that makes them. “We hope we can generate the same return for retail investors as we have for our venture investors,” Varun says. The duo insist that Honasa is still a young company and their journey is just getting started so there is so much more to come. “We want to build these brands for India, and take them to the world,” he adds.
It is this zeal to create value for its investors and customers that carves Mamaearth and Honasa out from the pack of D2C companies trying to capture our imagination on social media. Not only is this focus translating into sales and consumer trust, but is also paving the way for future founders to dream big.
Ghazal and Varun are committed to creating value. Somewhere during our conversation, Varun had made an interesting comment, “If your mama is not around to help you, Mamaearth will be”. I looked at him for a second if he was making a joke. His face was inscrutable. I think he was serious. Mamaearth isn’t playing. They’re here to stay.
