MUMBAI, May 13 -- Sugar Cosmetics, once among India's fastest-growing beauty startups, is seeking a sharply discounted funding round after an aggressive offline expansion and slowing sales growth strained its finances, according to four people familiar with the matter.

The Mumbai-based beauty brand has begun a process to raise Rs.100-150 crore after grappling with a severe cash crunch over the past six months amid declining revenue, a shrinking offline footprint and rising employee attrition, the people said.

The fresh fundraise is likely to happen at a valuation of Rs.1,400-1,500 crore, sharply lower from its peak valuation of about Rs.3,000 crore in 2022, two of the people said. While typical growth investors are unlikely to invest in...