Varalaxmi was born to actor Sarathkumar and Chaya while her stepmother is Raadhika Sarathkumar. She graduates in microbiology with a Master’s in Business Management degree from the University of Edinburgh, and honed her acting skills at Anupam Kher’s Acting School in Mumbai, before becoming an actress.
Varalaxmi signed on to star in Vignesh Shivan's romantic drama film, Podaa Podi (2012) during June 2008, citing that the opportunity to portray a London-based dancer had excited her. Co-starring alongside Silambarasan, Varalaxmi won critical acclaim for her performance. Soon after the film's release, Varalaxmi worked on Sundar C's masala film, Madha Gaja Raja alongside Vishal, but the film remains unreleased owing to financial troubles. Her second release was the Kannada film, Maanikya. In 2014, she began filming for Bala's Tharai Thappattai for which she received critical acclaim for her performance. Her upcoming films include Kasaba Mammootty Movie, Madha Gaja Raja (MGR), Nataraju Thane Raju (NTR).