Restructuring efforts at Good Glamm fall through as creditors assume control, intending to sell off each brand individually.
In a surprising turn of events, the Good Glamm Group, once a poster child of India's direct-to-consumer (D2C) boom, is facing a dramatic collapse. The online beauty and wellness platform, which includes brands such as MyGlamm, POPxo, and BabyChakra, is being dismantled and sold off individually due to a combination of financial struggles, complex ownership structures, and the inability to find a group-wide solution to address these challenges.
The main reasons for Good Glamm's predicament include significant financial strain, complicated ownership and financing arrangements, lender intervention, and operational challenges. Over the past few years, the company has faced financial pressures that have hindered its ability to operate effectively as a unified entity. This strain was exacerbated by its aggressive expansion strategy during the 2021 funding boom, which saw the acquisition of POPxo and BabyChakra among others.
The group's complex ownership and financing arrangements have further complicated efforts to restructure and refinance. This complexity has made it difficult to implement a timely, group-wide resolution to address financial woes. Lenders have enforced their charge on individual brands, effectively forcing the sale of each brand separately rather than pursuing a group-level revival.
Despite attempts to restructure, including refinancing talks and strategic investments, Good Glamm has been unable to overcome operational challenges. This situation has led to the sale of brands like Sirona, MissMalini, and ScoopWhoop earlier in the year, further decimating the group's unified structure.
In response to these challenges, the company's CEO, Darpan Sanghvi, has committed to using part of his future earnings to repay any outstanding employee dues if the sale of brands does not resolve these obligations. He has also pledged to create a Good Glamm Restitution Fund within the next 60 days to help resolve outstanding dues to stakeholders.
Investor confidence in The Good Glamm Group has dwindled, as board members from Accel India, Bessemer Venture Partners, and Prosus Ventures have stepped down. Brands still under the group include Wehive Technologies, Amishi Consumer Technologies, Luxeva India, Organic Harvests, Syscom Organic World Pvt Ltd, and Infomoko Technology Pvt Ltd. However, these too may fetch little value, an analyst said.
Good Glamm became a unicorn in 2021 after investments from Warburg Pincus and Prosus. Since its inception, the company has attracted a number of high-profile investors, including Alteria Capital, Amazon India, Ascent Capital, Chiratae Ventures, DSG Consumer Partners, Dharma Productions, Samaa Capital, Stride Ventures, Times Internet, Trifecta Capital, and Wipro Consumer Care Ventures. In its last reported funding round in March 2024, it raised $30 million (Rs 259 crore) from Warburg Pincus, Prosus, Bessemer India, and Accel Partners.
As the Good Glamm Group disintegrates, Darpan S, co-founder of Sanghvi Beauty and Technologies Pvt Ltd, which operates the MyGlamm brand, has expressed a desire to share "what went wrong" in the near future, hoping to help other entrepreneurs navigating similar paths. The sale of the remaining brands will mark the failure of the group's restructuring efforts, but it is hoped that lessons learned from this experience will pave the way for future success in the competitive D2C market.
The financial struggles and complex ownership structures of the Good Glamm Group have led to the need for individual brand sales, impacting its business operations. Darpan Sanghvi, the CEO, has committed to repaying employee dues and creating a restitution fund following the sales.
Investing in the Good Glamm Group has become less appealing due to dwindling confidence, board member resignations, and the group's disintegration, which could result in little value for the remaining brands. Darpan S, co-founder of Sanghvi Beauty and Technologies Pvt Ltd, aims to share lessons learned from this experience to help other entrepreneurs in the direct-to-consumer market.
