The Good Glamm group, a beauty and personal care-focussed ecommerce roll-up platform, has increased its stake to 90% in direct-to-consumer (D2C) mother- and baby care brand The Moms Co.
It had acquired a 75% stake in the firm in 2021.
The hike in holding is also linked to its founders — Malika Sadani and Mohit Sadani — leaving the firm and stepping away from day-to-day operations.
Good Glamm’s operating model is similar to roll-up ecommerce, where multiple internet-focused brands are brought by an entity under one umbrella to grow using shared resources. Founders of these brands tend to exit the business over time.
The Moms Co’s founders will remain on the board and will have the option to divest the remaining 10% stake in the next one year.
Sources told ET that the husband-wife duo had not been actively involved with the company’s operations since the middle of last year. Their exit has a non-compete clause of three years after they step away officially, a person aware of the matter said.
“We have taken our share up to 90% now. The balance 10% we will buy out from them next year. We want them to continue on the board and keep guiding (The Moms Co). The same path continues with other brands like Sirona and Organic Harvest as well,” Darpan Sanghvi, cofounder and CEO of Good Glamm group, told ET.
The content-to-commerce (C2C) platform is largely divided into three parts – the Good Brands Co, which is a portfolio of D2C brands in the beauty and personal care category headed by Sukhleen Aneja; the Good Media Co, which runs a portfolio of digital media properties like PoPXo, MissMalini, and BabyChakra, and is headed by Priyanka Gill, and the Good Creator Co, run by Sachin Bhatia, which operates social media influencer properties like Plixxo, Winkl, Vidooly and Bulbul.
The Good Glamm group had acquired Bulbul but has yet to officially announce the news.
“Since mid-2022, all the brands are being run by a strong central engine. This (increasing stake in The Mom Co) essentially is a start of that consolidation,” Sanghvi said.
He declined to share the company’s expected revenue for FY23 but said that the Good Glamm group has seen its revenue jump 2-2.5x since January 2022, when most of the acquisitions took place.
The Moms Co was Good Glamm’s largest acquisition and came at the peak of its fundraising in 2021 at a valuation of about Rs 500 crore.
The brand, since then, has doubled its monthly revenue run-rate to about Rs 24 crore per month.
Aneja, CEO of the Good Brands Co, will now be leading The Moms Co business.
The Good Glamm group is valued at $1.2 billion after raising $150 million from Prosus Ventures and others in November 2021. ET
ET reported last year that the Mumbai-based group was looking for a fresh fundraise of over $150 million but deal talks didn’t move forward amid a softening of valuations and cautious investor sentiment.
It was looking to raise the new cash to acquire Raymond group’s consumer brands including Park Avenue and Kamasutra, and buy out men’s grooming brand Ustraa, ET had reported.
Sanghavi, without giving details, said it plans to enter the men’s products segment later this year.
Consolidation on cards
The consolidation and the exit of its prominent founders come at a time when D2C brands are being acquired as distress sales in many cases as tech investors have slowed down investment amid tighter macroeconomic conditions.
Goat Brand Labs, backed by Flipkart Ventures and Tiger Global, acquired Chumbak, along with other D2C brands in January in a fire sale.
Traditional brick and mortar companies like Unilever, Aditya Birla Group and ITC have also acquired multiple D2C brands like Oziva, Wellbeing Nutrition, Yoga Bar, and Bewakoof among others.
On whether the company could have acquired brands at a cheaper price compared to 2021, Sanghvi said the Good Glamm group got the timing right as far as its acquisitions were concerned.
“We have market leaders in the categories we are in, be it in hygiene, baby care, organic space, and the hair care space has really given us the wings to grow and continue to this growth,” Sanghvi said. “To build these brands to this level would have taken three years. Three years from 2021. In hindsight if I look at it, what has really set us apart is that we have been able to grow quickly at that point of time and really create the largest beauty D2C portfolio.”
The Good Glamm group uses these internet properties to promote products across its D2C brands. This turns out cheaper compared to promoting through traditional internet real-estate like Meta and Alphabet.
This strategy has helped Good Glamm group reduce its customer acquisition costs from $15 to $1.5, Sanghvi told ET.
On December 20, rollup commerce company Mensa Brands acquired online lifestyle publications MensXP, iDiva, and influencer marketing management firm Hypp from Times Internet, the digital arm of the Times of India group which also publishes the Economic Times.
Other big roll-up commerce companies in India include SoftBank-backed FirstCry’s Globalbees, Goat Brand Labs, Fireside Ventures-backed 10club, Upscalio and Thrasio India.