India’s Skincare Startup Illusion, A23’s Legal Route, and Pixxel & Dhruva Space Hitch Ride

India’s skincare shelves today aren’t dominated by labs or dermatologists - they’re dominated by marketing departments. The D2C skincare revolution, which birthed brands like Mamaearth, WOW Skin Science, Minimalist, etc. is less about what’s in the jar and more about what’s on the label. This is the paradox at the heart of the playbook: products that cost as little as ₹37 to manufacture are sold for ₹500 to ₹1,000, with the 90% gross margin not flowing to the bottom line but instead being poured into celebrity endorsements, Instagram ads, and deep discounts.

The model is deliberately high-burn. Mamaearth, for instance, grew revenues from ₹964 crore in FY22 to nearly ₹1,970 crore in FY24, but remained unprofitable until just before its IPO. That profitability was not an outcome of organic unit economics - it was a calculated narrative reset designed to impress public markets. IPO documents made it explicit: over half the fresh issue proceeds, around ₹182 crore, would go straight into ad spends. The game wasn’t making money; the game was building trust signals fast enough to hit liquidity events.

WOW Skin Science followed a similar trajectory, losing ₹130 crore in FY24 while spending ₹107 crore on marketing - almost 29% of its expenses. Minimalist, by contrast, offers a counterpoint but not a total departure. In FY24, it posted ₹350 crore revenue and ₹11 crore profit, with marketing spends at about ₹86 crore - roughly 25% of sales, versus Mamaearth’s 35-40%. So yes, Minimalist “burns less,” but only relatively. Its profitability came from tighter SKU focus, repeat purchase rates nearly 3x the industry average, and efficiency in digital acquisition. But it’s still far from a capital-light FMCG, its survival rests on managing marketing intensity better than peers, not eliminating it.

This dynamic hasn’t gone unnoticed. At-home salon platforms like Urban Company, and even house-help services experimenting with wellness and personal care products, have realized the same truth: the D2C skincare business is essentially a marketing arbitrage. Whoever owns distribution can own margin. That’s why Urban Company, for example, has been steadily pushing its private-label range of facials, serums, and body scrubs through its salon partners. The logic is simple: if customers are acquired for services, skincare products can be upsold without heavy CAC. Because house-help and salons already have the customer's trust, they can launch their own products more easily and cheaply than direct-to-consumer (D2C) brands.

But the treadmill of discounts and logistics remains. Brands mark products high to create war-chest margins, only to lose those margins in platform-driven discount wars on Amazon and Flipkart. Meanwhile, expensive packaging and premium fulfillment eat into what’s left. This is why the final pivot in the playbook is almost predictable: go offline. Mamaearth’s tie-up with Reliance Retail put it in over 1,000 Smart Bazaars and Smart Points in a single move, while its FMCG footprint expanded to over 240,000 outlets. Minimalist, too, has entered offline distribution, though cautiously, to hedge against digital CAC fatigue.

Another layer to this story is the fragile foundation these brands are built on. India’s light-touch regulation for cosmetics has allowed marketing-first products to scale rapidly, but as scrutiny tightens - especially around ingredient claims and safety standards - the same low-barrier advantage could flip into liability. Their growth also leans precariously on the influencer economy: a reel going viral can drive sales overnight, but ad costs are rising, algorithms shift, and consumers are increasingly skeptical of skincare pitches. Globally, this pattern has played out before - Glossier in the U.S. rode Instagram to cult status only to stumble once consumer fatigue set in.

And in India, the endgame may not be IPOs or unicorn valuations but consolidation. Many D2C skincare brands are built to be bought out by big companies. Large companies such as HUL or Reliance Retail acquire these businesses to improve their operations and then sell their goods through a bigger chain of physical stores. Basically, these "independent" brands are just future acquisitions, not long-term standalone businesses.

For investors and founders alike, the question is clear: do you want to build a brand that looks good in ads, or one that survives beyond them?

Let’s go through what else is happening in Indian startup world - Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.

“Nyay Ke Mandir Mein Insaf Ki Asha”: Head Digital Works Moves K’taka HC Against Real Money Gaming Ban

Online gaming giant A23 (by Head Digital Works) has taken the Karnataka HC route, challenging the state’s sweeping ban on real-money games.

The new Bill blurs the line between skill and chance, outlawing both in one stroke. With penalties as steep as three years in jail or INR 1 Cr fines, the industry’s next big showdown now plays out in court.

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“Ajj Din Chadheya”: Dream Sports-Owned FanCode To Shut Sports Merchandise Business

Dream Sports-owned FanCode is pulling the plug on its sports merchandise arm, FanCode Shop, by October this year.

After the gaming ban hit its parent, the company is now doubling down on content as its core play. Fans can still grab their jerseys and gear till October after that, it’s game over for the shop.

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“All Eyez On Me”: Pixxel, Dhruva Space launch satellites onboard SpaceX's rocket

Indian space tech got a boost as Pixxel and Dhruva Space hitched a ride on SpaceX’s Falcon-9 from California this week.

For Pixxel, the three new Firefly satellites wrap up phase one of its six-satellite hyperspectral constellation. With all eyes (and lenses) now on Earth, the startup promises clearer, closer views from space than ever before.

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1. Prosus is in talks to pump $200 Mn into bike-taxi startup Rapido at a $2.5 Bn valuation. The deal could be a mix of primary and secondary transactions, following Prosus’ earlier INR 250 Cr investment in February.
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2. API banking platform TransBnk has raised $25 Mn in its Series B round led by Bessemer Venture Partners. The 2022-founded startup will use the funds to expand into Southeast Asia and the Middle East while deepening its India presence.
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