Warburg Pincus-backed The Good Glamm Group (GGG), the company which owns and runs several beauty and personal hygiene brands, has put at least three of its companies up for sale, four people aware of the developments told Moneycontrol.
Brands like Organic Harvest, The Moms Co and Sirona – all owned by The Good Glamm Group (GGG) – are up for sale at a time when the content-to-commerce company is starved for cash and is attempting to raise capital to keep operations afloat.
Darpan Sanghvi, Group founder and CEO of Good Glamm Group has met Mamaearth’s co-founder and CEO Varun Alagh in Delhi, Purplle’s co-founder and chief executive Manish Taneja in Mumbai and top executives from beauty retailer Nykaa over the past few months to either explore the sale of a single brand or multiple brands from his company’s portfolios to these firms, three of the persons cited above told Moneycontrol.
None of those talks have fructified.
“There’s no way GGG can sell all of its 10-12 brands to a single buyer, individual brands need to be sold separately to different companies. From GGG’s portfolio, Sirona is the most promising one as it is close to EBITDA profitability. Darpan however wants to sell the brand for Rs 500-550 crore which is too high. A deal at around Rs 150-180 crore would still make sense,” a person who was involved in negotiations told Moneycontrol on the condition of anonymity.
A second person said GGG’s approach will not yield results.
“GGG selling 3-4 of its best companies to raise money does not make sense. Once you sell your jewels, you cannot use the capital to run other brands which have not been able to scale,” the second person added.
The Good Glamm Group denied these developments in response to queries sent by Moneycontrol on the afternoon of October 10.
“We would like to take the opportunity to confirm to you that your statements below are completely false. Rather than speaking to strategic buyers, over the last few months, the Group has in fact invested significantly in completing its pending acquisitions, gotten closer to profitability and continued to grow,” a company spokesperson said in response to Moneycontrol’s queries.
“...the Group had received interest from financial investors for investments in the parent and from a few strategic buyers for investments in some of our brands individually. We are currently in the last stage of negotiations for the same. And we should be in a position to announce the same in the next few weeks,” the spokesperson added.
A spokesperson for Purplle, in response to Moneycontrol’s queries said, “There are currently no conversations with the Good Glamm Group as stated in your email.”
"We affirm that we are not engaged in any such discussions and remain fully focused on advancing the next phase of growth for our existing brands under Honasa,” a spokesperson for Honasa Consumer, the company that runs Mamaearth, said in response to queries. Nykaa did not respond till the time of publishing.
Inside Good Glamm — Low sales, high burn
Over the past months, The Good Glamm Group has reduced its monthly cash burn to around Rs 12-15 crore from Rs 25-30 crore it was burning earlier, a person with knowledge of the matter told Moneycontrol.
The reduction in cash burn, however, has come at the cost of the company’s revenues. The Prosus-backed company has seen its monthly sales halve from Rs 50-60 crore earlier to Rs 25-30 crore now as most of its brands struggle to scale in size.
“Good Glamm Group overspent in FY24 and FY23 and spread itself too thin. It made acquisitions even if they weren’t going to work out only to meet gross merchandise value (GMV) targets,” one of the persons cited above said.
While brands like The Moms Co and Sirona are promising, The Good Glamm Group also has companies like Miss Malini and POPxo which are additional costs to the company, the person added.
The Good Glamm Group raised an additional $30 million (around Rs 240 crore) at a flat valuation of $1.26 billion from existing investors such as Warburg Pincus, Bessemer Venture Partners, Accel and Prosus to repay debt and fund growth plans. That was the company’s first large cheque in several months as the company struggled to scale.
GGG’s overview
While the individual companies were started back in 2015, The Good Glamm Group came together in 2021. CEO Sanghvi founded D2C startup Myglamm in 2017, Priyanka Gill founded digital media platform POPxo in 2013 and Naiyya Saggi founded online parenting startup BabyChakra in 2015.
The three brands came together and rebranded as The Good Glamm group in September 2021. Since then, the group has acquired a dozen brands, including ScoopWhoop, St. Botanica and several others.
The Good Glamm Group has raised around $400 million in nine years from marquee investors like Amazon, Accel, Bessemer Venture Partners, Prosus Ventures, Warburg Pincus and several others who valued the company at $1.26 billion.
While the Good Glamm Group had set its sights on an IPO in FY25, the journey has been challenging for the company.
From layoffs and exits at the top deck to legal tussles and founders leaving, the company has seen it all in the recent months including vendor payments piling up. The company laid off 150 employees in April when Sukhleen Aneja, CEO of the company’s core business, exited the company. Aneja later joined Nykaa, a company that competes with The Good Glamm Group.
Apart from Aneja, Samrat Sehgal, former chief supply-chain officer, Gaurav Tejwani, former chief product officer, Priyanka Gill, co-founder of PopXo, are other top executives who have left the company over the past months, according to several media reports.
Founders of Organic Harvest and Sirona too have left The Good Glamm Group following a full acquisition. Organic Harvest was founded in 2013 by Rahul Agarwal, while Sirona was co-founded by Deep Bajaj and Mohit Bajaj in 2014.
Sirona is the same company that, along with Indian Angel Network (IAN), had sent a notice of default to The Good Glamm Group, alleging non-payment of final dues. Sirona and The Good Glamm Group however settled the matter on October 10, the companies sent in a joint statement after Moneycontrol sent queries to the firm.
The exits and legal notices had come at a time when the company’s losses had spiked.
While the company is yet to file its FY24 results, The Good Glamm Group's FY23 results, which came after a 15-month delay, showed the company’s losses had spiked to Rs 917 crore, 153 percent higher than Rs 363 crore incurred in FY22.
Its operating revenue stood at Rs 603 crore, 185 percent higher than Rs 211 crore recorded in FY22, thanks to multiple acquisitions that the company made.
Historically, the Thrasio model of acquiring brands and scaling them by following a house of brands strategy has not yielded positive results for companies in India and even globally. The Good Glamm Group is not any different.
And these developments only make it harder since the company is now attempting to raise an additional $40 million, after closing a $30 million round, aiming for profitability in FY24 and is preparing to go public around June 2025.
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