Startup Deep Dive : Earth Rhythm — Nykaa bought the brand outright even as revenue kept falling

A homemaker who spent seven years away from paid work, taught herself cosmetic formulation to fix her son’s skin, and started selling handmade products from her living room now runs a brand that a stock-exchange-listed company owns almost outright. In May 2022 Nykaa paid about Rs 41.65 crore ($43.4 million at $1 ≈ Rs 96.0) for an 18.51% slice of Earth Rhythm; by 5 September 2026 its parent, FSN E-Commerce Ventures, had completed the purchases that take the holding to roughly 100%, as per an indianstartupnews report on the exchange filing.

Here is the contradiction the numbers force. Even as Nykaa kept buying, Earth Rhythm’s revenue was going the wrong way: operating revenue climbed to Rs 32.46 crore in FY24 (TheKredible, on figures sourced to the company’s filings), then fell to Rs 26.7 crore in FY25 (Inc42) and Rs 23.75 crore in FY26 (indianstartupnews). This is the story of a self-taught founder, a clean-beauty bet, deep losses, and a strategic buyer who wanted the brand more than the growth curve suggested it was worth.

Quick facts

What Earth Rhythm sells, and to whom

Earth Rhythm is a Gurugram-based clean-beauty and personal-care brand that positions itself on formulations “backed by clinical research and crafted in-house by trained cosmetic chemists,” in the words TheKredible uses to describe it. It sells to the efficacy-minded Indian consumer who reads ingredient lists.

• Categories: skincare, haircare, makeup, and bath & body (company channels; Inc42 describes it as an ecommerce personal-care company).
• Range: about 160 products, according to The Better India’s profile of founder Harini Sivakumar.
• Channels: direct-to-consumer via its own site plus third-party marketplaces, with distribution that BeautyMatter reported extends offline and to the US, Germany, Bhutan and Nepal as of its April 2022 coverage.
• Positioning: “smart and safe” skincare and sustainable packaging, a claim Nykaa echoed in April 2022 when it said the investment would strengthen the portfolio and its move into sustainable beauty (BeautyMatter).

The origin: a kitchen-table formulator

The founding insight was personal and unglamorous. Harini Sivakumar married at 22 and, by her own account to The Better India, was a homemaker for seven years and an average student before that. Her son was diagnosed with Down syndrome, and she stepped back to care for him. When he started school five years later, she went looking for something of her own.

She started by trying to solve his skin concerns. In 2015 she began a homegrown skincare line, registered it as an MSME, and sold products within her residential community while working out of her home, The Better India reports. There was no chemistry degree behind it. She attended courses, taught herself formulation, developed new products, and in 2019 relaunched the venture formally as Earth Rhythm with her father’s support. The legal entity, Earth Rhythm Private Limited, was incorporated in 2020. What began as a mother’s fix for one child’s skin became a catalogue of roughly 160 products.

The struggle years

Two things make the early record hard rather than heroic: the losses were large relative to sales, and the growth story did not hold. In its June 2022 coverage, BW Disrupt reported Earth Rhythm had grown revenue more than 500% between the year ending 2021 and the year ending 2022, with customers up 533% and website visits up threefold, and it said the brand was targeting a Rs 150 crore annual run-rate for FY23. That target never arrived. Operating revenue for the full FY23 came in at Rs 26.03 crore, per TheKredible.

The cost base is where the strain shows. To chase that growth, the company spent far more than it earned, and advertising was the single largest line. Losses ran at roughly two-thirds of revenue in FY23 before narrowing. A brand built on word-of-mouth in one apartment complex had become a business that needed heavy paid acquisition to keep selling, and the gap between the Rs 150 crore ambition and the Rs 26 crore reality is the honest measure of how hard the D2C beauty market is to scale.

The turning point: Nykaa walks in

The single event that reset Earth Rhythm’s trajectory was Nykaa’s arrival on the cap table, and then its steady march to control. In April 2022 Nykaa led an $8 million Series A, taking 18.51% for about Rs 41.65 crore, according to BeautyMatter and later confirmed in the stake history reported by indianstartupnews. On one side of that event sat a loss-making brand with roughly Rs 26 crore of annual revenue; on the other sat a listed beauty retailer with a nationwide distribution machine and its own house-of-brands strategy.

What followed was not a growth explosion but an ownership consolidation. Nykaa’s board approved a further investment of up to Rs 44.5 crore in August 2024 (Entrepreneur), then deployed Rs 39.5 crore in November 2024 to take its holding to 74.63% and make Earth Rhythm a subsidiary (Business Standard; indianstartupnews). It topped up by Rs 5 crore in June 2025 to reach 75.83%, and on 5 September 2026 its parent FSN E-Commerce Ventures completed the purchase of a further 24.2% for up to Rs 9.4 crore (indianstartupnews; Storyboard18), taking the group to near-complete ownership. The buyer wanted the brand and its formulation capability even as revenue slipped from Rs 32.46 crore in FY24 to Rs 23.75 crore in FY26.

The money behind it

• Seed round: about $1.2 million in July 2021 from Anicut Angel Fund (BeautyMatter).
• Series A: $8 million in April 2022, led by Nykaa with participation from existing investor Anicut Capital; Nykaa took 18.51% for about Rs 41.65 crore (BeautyMatter).
• Total raised: about $9.2 million across its independent funding rounds (Inc42).
• Nov 2024 follow-on: Rs 39.5 crore from Nykaa, lifting its stake to 74.63% and making Earth Rhythm a Nykaa subsidiary (Business Standard; indianstartupnews).
• June 2025 top-up: a further Rs 5 crore, taking Nykaa to 75.83% (indianstartupnews).
• September 2026: FSN E-Commerce Ventures completed an additional 24.2% for up to Rs 9.4 crore, reaching roughly 100% ownership (indianstartupnews; Storyboard18; YourStory).

Named backers and what each changed:

• Anicut Capital / Anicut Angel Fund — the earliest institutional believer, funding the 2021 seed and following into the Series A (BeautyMatter).
• Nykaa (FSN E-Commerce Ventures) — the strategic acquirer that moved from minority investor to majority owner to near-full owner, folding Earth Rhythm into its portfolio of owned beauty brands (Business Standard; Entrepreneur; indianstartupnews).

A widely repeated headline, including in The Better India and DNA, described Earth Rhythm as a “Rs 200 crore company.” That figure is not supported by the company’s filed revenue, which sits in the Rs 24-32 crore band across FY23-FY26; it likely reflects a valuation or aspiration rather than sales, and this piece uses the filed revenue.

How it makes money

The model is straightforward physical-product retail; the difficulty is the margin math. Money comes in from selling personal-care SKUs; money goes out on ingredients and manufacturing, on marketplace and platform fees, and above all on marketing to acquire and retain customers.

• Revenue: sales of ~160 products across skincare, haircare, makeup and bath & body, direct-to-consumer and through marketplaces (The Better India; company channels).
• Largest cost: advertising, which was 31.70% of total expenses in FY23 and 32.08% in FY24, per TheKredible — the clearest sign that growth was being bought, not compounding organically.
• Margin position: deeply negative at the operating level. EBITDA margin was -67.92% in FY23, improving to -47.30% in FY24 (TheKredible) — better, but still far from break-even.
• The part people get wrong: the “clean beauty” premium does not automatically translate into gross-margin comfort when a third of the cost base is advertising and revenue is under Rs 35 crore. Scale, not positioning, is what fixes unit economics here.

The numbers

Revenue and loss, in Rs crore, on figures reported by TheKredible (FY23-FY24, sourced to the company’s filings), Inc42 (FY25) and indianstartupnews (FY26):

• FY24 revenue rose 24.7% over FY23’s Rs 26.03 crore, while total expenses rose 10.9% to Rs 51.21 crore, per TheKredible.
• The FY24 net loss of Rs 15.69 crore narrowed from Rs 16.54 crore in FY23 (TheKredible): the loss shrank even as revenue grew, which is the direction a maturing brand wants.
• But the top line then reversed: revenue fell 17.6% in FY25 to Rs 26.7 crore (Inc42), and slipped further to Rs 23.75 crore in FY26 (indianstartupnews) — roughly 27% below the FY24 peak across two years.

Where the money comes from

Public filings do not give a clean, current channel-by-channel or category-by-category revenue split for Earth Rhythm, so the honest answer is drawn from what is documented rather than a precise breakdown:

• Channel mix: a blend of owned direct-to-consumer sales and third-party marketplaces; BeautyMatter reported in April 2022 that distribution also extended offline and into international markets including the US, Germany, Bhutan and Nepal.
• Category mix: spread across skincare, haircare, makeup and bath & body, with skincare the anchor given the brand’s origins (company channels; Inc42).
• The surprise: the buyer’s own retail network is now a natural distribution channel. As a Nykaa-owned brand, Earth Rhythm’s route to shelves runs through the very platform that once merely stocked it — a structural shift that a pre-acquisition segment split would have missed.

Where a precise segment or geography split cannot be verified from filings, it has been left out rather than estimated.

The risks

• Declining revenue. The top line has fallen for two consecutive years, from Rs 32.46 crore in FY24 to Rs 26.7 crore in FY25 and Rs 23.75 crore in FY26 (TheKredible; Inc42; indianstartupnews). A brand that shrinks while its category grows risks losing shelf priority and mindshare, and makes the path to profitability longer.
• Structural loss-making with heavy ad dependence. Advertising was about a third of total expenses in both FY23 and FY24, and EBITDA margin was still -47.30% in FY24 (TheKredible). If paid acquisition is switched off to cut losses, revenue may fall faster; if it stays on, losses persist. That is a hard trade the new owner must manage.
• Loss of independence. With FSN E-Commerce Ventures now the near-complete owner (indianstartupnews), Earth Rhythm’s strategy, pricing and shelf space sit inside a larger portfolio that also houses competing house brands. The brand’s priorities are no longer set solely by its founder, which can constrain the bets an independent challenger might otherwise take.

The takeaway

The transferable lesson is about what an acquisition actually buys. Nykaa did not pay up for Earth Rhythm’s growth curve, which was flat to falling; it paid for a brand, an in-house formulation capability, and a founder story that self-taught its way from a living room to a national catalogue. For founders, that reframes the exit: a strategic buyer can value the thing you built more than the spreadsheet does, especially when the buyer owns the distribution that can make your unit economics work at last. For the rest of us, Earth Rhythm is a clear-eyed reminder that “clean beauty” and heavy advertising do not by themselves produce profit — scale and a route to market do, and sometimes the only way to get both is to hand over the keys.

Frequently asked questions

Who founded Earth Rhythm and when?

Harini Sivakumar founded it, starting a home skincare venture registered as an MSME in 2015, relaunching it as Earth Rhythm in 2019, with Earth Rhythm Private Limited incorporated in 2020; Sivakumar Varadarajan is named as co-founder (The Better India; TheKredible; Inc42).

Does Nykaa own Earth Rhythm?

Yes. Nykaa moved from an 18.51% stake in May 2022 to 74.63% in November 2024 (a subsidiary) and, through parent FSN E-Commerce Ventures, completed a further 24.2% purchase by 5 September 2026, reaching roughly 100% ownership (indianstartupnews; Business Standard; Storyboard18).

What is Earth Rhythm’s revenue?

Operating revenue was Rs 32.46 crore in FY24, Rs 26.7 crore in FY25 and Rs 23.75 crore in FY26 — a decline of about 27% from the FY24 peak (TheKredible; Inc42; indianstartupnews).

Is Earth Rhythm profitable?

No. It posted a net loss of Rs 15.69 crore in FY24, narrowed from Rs 16.54 crore in FY23; loss figures for FY25 and FY26 were not publicly disclosed at the time of writing (TheKredible).

How much funding did Earth Rhythm raise before the Nykaa buyout?

About $9.2 million across its independent rounds, including a roughly $1.2 million seed from Anicut Angel Fund in July 2021 and an $8 million Series A led by Nykaa in April 2022 (BeautyMatter; Inc42).

Sources

Figures are as of September 2026. Currency converted at $1 ≈ Rs 96.0 as of 18 September 2026 (Trading Economics).

• TheKredible — “Nykaa-backed Earth Rhythm posts 24% revenue growth in FY24; expenses rise by 11%” (FY23-FY24 revenue, expenses, net loss, ad share, EBITDA margin), January 2026.
• Inc42 — Earth Rhythm company profile: funding, revenue and investors (FY25 revenue, funding total, founding, Gurugram HQ), 2026.
• indianstartupnews — “Nykaa parent FSN E-Commerce Ventures completes acquisition of additional 24.2% stake in Earth Rhythm” (stake history, FY24-FY26 turnover, completion date), September 2026.
• Business Standard — “Nykaa acquires majority stake in clean beauty brand Earth Rhythm” (November 2024 subsidiary deal), November 2024.
• Entrepreneur India — “Nykaa acquires majority stake in Earth Rhythm” (August 2024 board approval up to Rs 44.5 crore), 2024.
• Storyboard18 — “Nykaa to acquire additional 24.17% stake in Earth Rhythm for up to Rs 9.4 crore” (May 2026 announcement), May 2026.
• YourStory — “Nykaa completes acquisition of additional 24.2% stake in Earth Rhythm,” September 2026.
• BeautyMatter — “Indian clean beauty brand Earth Rhythm raises $8 million Series A” (seed, Series A, Nykaa 18.51% for Rs 41.65 crore, Anicut, distribution), April 2022.
• BW Disrupt — “Earth Rhythm registers 500% jump in revenues” (FY22 growth, Rs 150 crore FY23 target), June 2022.
• The Better India — profile of Harini Sivakumar (founder background, 2015 start, ~160 products, workforce), 2022.

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