FAE Beauty Empowers You to Say Loudly and Proudly, “Mai Apni Favourite Hoon”

FAE Beauty stands for Free and Equal, founded in November 2018 by typical entrepreneur Karishma Kewalramani, has emerged as a transformative force among all other giants of the Indian beauty industry, especially in an era dominated by beauty standards that are sometimes neglecting the diverse skin tones around them. The acronym stands for Free and Equal, implying these values of inclusion, innovation, and sustainability. The Mumbai-based brand does not believe in traditionalism and brings forth path-breaking products, which can be used for any skin tone, gender, or texture. Keeping in view the demand these days for ethical and environmentally-conscious products, of course, FAE Beauty is committed to its vegan and cruelty-free formulations. Their goal was simply that any woman who uses FAE Beauty products should say, “Main Apni Favourite Hoon”.

The US $15 billion Indian beauty market in 2023 was historically tilted towards lighter skin tones, leaving a large part of its consumer base unattended. It was quite clear to Karishma, and therefore, she set out to change this story. Today, FAE Beauty has become a pioneer in starting the discussion on representation and leading by example for the industry as a whole. The journey of creating, from being poor to being profitable, is enough to prove that purpose-guided entrepreneurship actually works.

The Birth of FAE Beauty – A Personal Endeavour

Her entry into the beauty business was not an act of a business but an extremely personal one – something missing from having spent almost all her life in California and then coming back to India. Out of the 74% of Indian women, with brown and dark skin tones, Karishma found a big gap that mainstream beauty brands had created.

She set off to start her entrepreneurial venture with a wild dream – developing products that would honor one’s identity. With all that ambiance of learning in business administration at the University of California, Berkeley, and with her mastery as a makeup artist, Karishma stood FAE Beauty in a different light. The first product the brand launched, the Lip Whip, immediately became a head-turner, its shades and texture having an appeal to all skin shades. That gave her more hope in terms of flying with her elusive beauty dream client.

Financial Gains: Growth through Adversities

The financial picture of  FAE Beauty showcases the ability of this company’s survival and elasticity. Like every other startup, the FAE Beauty company found itself losing money at the beginning of sales and then continued to build revenues. Here is an example of FAE’s annual financial performance:

FY 2020-2021: 

The company did record revenues of ₹30 lakh, however, it incurred losses of ₹80 lakh owing to high costs of marketing and operational inefficiencies. 

FY 2021-2022:

Revenue increased to ₹70 lakh and losses increased to ₹1.5 crore as the company scaled operations and invested in many product developments.

FY 2022-2023: 

For the first time, revenues amounted to ₹3.3 crore but losses amounted to ₹2.5 crore due to heavy expenditure on expansion. 

FY 2023-2024:

Revenue has grown to about ₹7 crore with losses narrowing down to ₹80 lakh, signifying FAE Beauty’s improved financial discipline and operational efficiencies. 

FY 2024-2025:

The business turned an income of ₹10 crore and a profit of ₹1.25 crore, being the first profitable year in its entire history, by October 2024. FAE is expected to close FY 2024-2025 with a net revenue of ₹22 crore.

Equity Structure and Funding:

FAE Beauty has now thrived with funds across a line of strategic investors through different rounds of funding:

FY 2020-2021: 

Raised ₹1.5 crore at valuations of ₹6 crore.

FY 2021-2022: 

Raised ₹2.4 crore, raising the valuation to ₹26 crore.

FY 2023-2024:

Fundraising in two rounds—₹2 crore at a ₹32 crore valuation and ₹3 crore at a ₹22 crore valuation.

The equity distribution shows concocting ownership models that tilt in favor of the founder of FAE Beauty:

• Karishma Kewalramani (Founder of FAE Beauty): 38%
• ESOP Pool: 10.3%
• Arihant Patni: 26%
• Titan Capital: 13.5%
• Shiprocket: 1.6%
• Other Investors and Family: Remaining shares

Unit Economics of a Product

FAE Beauty unit economics reflecting the brand moving towards sustainability include:

• COGS: 25% of net revenue
• Logistics and Gateway Commissions: 10%
• Marketing Expenses: 35%
• Overheads: 18%
• EBITDA: 12%

Marketing naturally took up a large share of the expenses, but best-seller-focused products like the Lip Whip and quick commerce new avenues have helped streamline operations by Karishma. As of 2024, quick commerce is expected to bring in 25% of revenue to FAE Beauty, validating the effectiveness of this move.

Starting the Revolution: Shark Tank India

FAE Beauty, on this occasion, made its breakthrough by going on Shark Tank India Season 4. Karishma came into the tank to have ₹1 crore for 1% equity signed, putting a value tag of ₹100 crore on the organization. This pitch seemed to float through a few sharks:

• Aman Gupta: For 3% equity ₹1 crore.
• Anupam Mittal: Changed offer from ₹1 crore to ₹1.25 crore for 3% equity.
• Peyush Bansal:₹1 crore for 3% equity.

Karisma has landed a joint deal worth ₹1 crore for 1.5% equity from Aman Gupta

and Namita Thapar at the conclusion of heated negotiations that have helped finalize a valuation of the company at ₹66.67 crore. The sharks praise the vision behind it but advise that the main focus now is on scaling operations and cutting customer acquisition costs.

The Face Behind FAE Beauty

Karishma Kewalramani is the founder of FAE Beauty, a Mumbai-based cosmetics brand that debuted in 2018. FAE stands for “Free and Equal,” which reflects the brand’s dedication to diversity and portrayal of all Indian skin tones. Karishma grew up in Mumbai and received her higher education in the United States. She holds a Bachelor’s Degree in Business Administration from the University of California, Berkeley. Following her education, she worked as a management consultant at A.T. Kearney in San Francisco, where she collaborated extensively with beauty brands. This event reignited her enthusiasm for the beauty industry. 

When Karishma returned to India in 2017, she enrolled in a cosmetics school and began working as a beauty artist. During this time, she discovered a big vacuum in the market: the absence of representation in Indian beauty. When Karishma returned to India in 2017, she enrolled in a cosmetics school and began working as a beauty artist. 

During this time, she saw a big market gap: the absence of representation in Indian cosmetic products. This realization inspired her to launch FAE Beauty, which aims to provide high-quality, inclusive, vegan, and cruelty-free products adapted to the diverse needs of Indian consumers. FAE Beauty has earned a reputation under her leadership for its dedication to authenticity, which includes publishing unedited product photographs and supporting inclusivity across all skin tones, ages, genders, and identities. The firm takes a “slow beauty” strategy, methodically creating and launching a small number of products every year to assure quality and originality.

Karishma’s transition from a business graduate and consultant to a beauty entrepreneur exemplifies her commitment to redefining beauty standards in India, making them more inclusive and representative of the country’s diversity.

Karishma creates inspiring stories: makeup artist turned businesswoman, resilient and creative, her mind extends beyond business into the larger discussion of what is beautiful in India, and she stands for inclusion in this regard. Under her lead, FAE Beauty has not only given creative shake-ups to markets but opened possibilities for a considerably diverse industry.

Conclusion

The transition of FAE Beauty from a mere startup to a profitable organization is proof of its commitment to being inclusive and quality-focused. The flexibility, imaginative brilliance, and connection that FAE Beauty builds on with varying audiences over time keep it distanced from others in a crowded competitive market. With the quick-in-commerce addition of product lines and expansion, FAE Beauty remains the beacon that shows how aspired entrepreneurship will redefine sectors.

The vision Karishma Kewalramani holds for a world where everyone feels they can be free and equal continues to propel the brand ahead. Having recorded its first profitable year, with ambitious revenue targets ahead, FAE Beauty is set on a path to redefine beauty-not just in India, but across the world.