Sports nutrition startup Nutrabay claims that its private label has achieved an 80% growth in revenue over the last year, driven by strong market demand for affordable, high-quality sports nutrition products.
As Indian consumers increasingly focus on preventive healthcare, direct-to-consumer (D2C) startups offering nutraceuticals are attracting investor attention. Nutraceuticals refer to over-the-counter nutritional supplements available in forms such as gummies, easy-to-consume capsules, powders, syrups, and gels. According to Tracxn, startups in the nutraceutical tech space have raised $180.3 million in less than three years. Despite being a niche sector, many leading venture capital firms—including Fireside Ventures, 3one4 Capital, Alteria Capital, Wipro Consumer, Sharpp Ventures, Stride Ventures, and B Capital—have invested in this segment. Experts predict that the sector will experience exponential growth in the coming years.
Around 274 startups have been founded in the last 15 years in the nutraceutical tech space in India, according to Tracxn. Some notable startups in the segment include Kapiva, The Good Bug, Plix, Gynoveda, &Me, Nutrova, Uparkama, The Power Gummies, Mojocare, Bright LifeCare, Azani and Zeroharm. Tapping into niche domestic markets and exploring export opportunities presents two significant revenue streams for these startups.
The awareness about preventive healthcare has led many Indians to seek out over-the-counter nutritional supplements, say experts. According to data from the ministry of food processing industries, India’s nutraceutical market is prepped to be a global leader at $4-5 billion. It is expected to grow approximately to $18 billion by 2025.
Investors view categories such as hair and beauty, immunity, children’s health, and feminine health as lucrative growth opportunities for nutraceutical startups. Additionally, consumers are seeking natural alternatives (plant-based, ayurveda, naturopathy, siddha) to conventional pharmaceuticals, which is giving this sector further momentum. “Judging by the trends, the nutraceuticals segment could record a double-digit CAGR in the next five years,” Prateek Tosniwal, co-founder, IVY Growth Associates and partner, MI CAPITAL Services told Fe.
Major FMCG companies are also tapping into the opportunity by investing in or acquiring these startups. Marico acquired a 58% stake in D2C nutrition brand Plix for Rs 369.01 crore in 2023 and Hindustan Unilever acquired a majority stake in OZiva in 2022.
Looking at the demand, online festivals such as Amazon Great Indian Festival Sale and Flipkart Big Billion Days, which usually offer huge discounts on electronics, offered the lowest prices on nutraceuticals this year. According to a mid-year online sales report by Unicommerce in July this year, while marketplaces offered attractive discounts across different categories, the rising consumer focus on healthy products and nutraceuticals noted higher demand leading to an impressive YoY order volume growth of over 78% in the health & pharma segment during the sale period in 2024.
“The D2C model presents an attractive avenue for new brands to reach health-conscious consumers more efficiently than ever,” Jinesh Shah, managing partner, Omnivore.
Sports nutrition startup Nutrabay claims that its private label has achieved an 80% growth in revenue over the last year, driven by strong market demand for affordable, high-quality sports nutrition products. It’s a profitable startup and has scaled to Rs 100 crore annual run rate (ARR). The startup processes over 3 million orders, delivering via various marketplaces like Amazon and Flipkart. Offline expansion is also comparatively easier for D2C startups in this category, say experts. This is because, unlike categories such as beauty, which requires an entire shelf or an exclusive store, nutraceuticals require limited shelf space. This allows them to expand across general and modern trade stores. For instance, 9Unicorns backed D2C startup Power Gummies not only sells through Swiggy, Myntra, Nykaa, Amazon and other marketplaces, its products are also available on the shelves of stores such as Health & Glow, Power House, Apollo Pharmacy and many others.
Content retrieved from: https://www.financialexpress.com/business/sme-investors-make-a-beeline-for-d2c-startups-offering-nutraceuticals-3653197/.
