Good Glamm delays April salaries, yet to settle dues of former employees TechTricks365

“The employees were told that the company will settle April dues along with May’s salary by June, and the full & final settlements to former employees will be paid as soon as the company completes its fundraising process,” one of the people cited above said.

“Some former employees have also not received their salary dues for February and March,” the second person cited above, who was formerly an employee, told Mint on the condition of anonymity. The person added that the company has not clearly communicated the status of payment to many of the employees laid off.

A spokesperson for Good Glamm declined to comment.

In January, the company also delayed salary payments to a section of its 300-member workforce, according to a report by The Arc. Mint could not immediately verify the total employee count after the layoffs.

Broadly, Good Glamm has seen a lot of churn in recent months as the company grapples with a severe cash crunch that forced it to consider raising fresh funds at a sharply lower valuation, which triggered the exit of three of its directors. The three directors from Accel India, Prosus, and Bessemer Venture Partners stepped down from Good Glamm’s board in November and December.

Fresh funds needed

Good Glamm currently needs about ₹250-500 crore to settle liabilities and payments to vendors, employees and founders of the companies they acquired, Mint reported earlier this year, citing a person familiar with the matter. “The immediate requirement to keep the lights on is around ₹180-200 crore, and the founder will do whatever it takes to keep the company running, including selling a controlling stake to any incoming investor,” the person had said in January, adding that the promoters are looking to raise at a near-zero valuation, which will wipe out the existing investors and their shareholding in the company.

The company’s plan to raise fresh funds is similar to what new-age omnichannel pharmacy Pharmeasy went through in 2020 when it raised capital at a sub-$500 million valuation, down from the earlier $5.6 billion. Earlier, Byju’s, once valued at $22 billion, had attempted to raise $200 million at a $250 million post-money valuation.

Good Glamm’s new funding round comes over a year after the company raised $30 million from investors through a rights issue in March 2024. The direct-to-consumer company had become a unicorn in 2021 after raising capital from investors such as Prosus and Warburg Pincus.

The company has been looking to cut costs and cash burn in the last 24-36 months. To conserve cash, it has scaled down brands, laid off teams, and reduced marketing efforts. In February, the company sold two of its brands—ScoopWhoop and Sirona Hygiene—to increase its runway and meet some of its immediate payment obligations, including employee salaries and vendor payouts.

Selling some brands

While Sirona was bought back by the founders, ScoopWhoop was acquired by Indian meme marketing startup Wubba Lubba Dub Dub for ₹18-20 crore after Good Glamm bought it for ₹100 crore in 2021.

The Darpan Sanghvi-founded startup saw losses balloon to ₹917 crore in FY23, a 150% jump over ₹362.5 crore in FY22. The company’s operating revenue stood at ₹603 crore in FY23, against ₹211.4 crore in FY22. It is yet to file its FY24 financials.

Good Glamm operates across multiple verticals. The Good Brands Co. comprises beauty and personal care brands such as MyGlamm, St Botanica, The Moms Co. and Organic Harvest, while The Good Media Co. includes POPxo, MissMalini, BabyChakra and Tweak India. The Good Creator Co. serves as an influencer platform alongside The Good Community.

The company also saw a series of senior-level exits last year. Sukhleen Aneja, chief executive officer of The Good Brand Co., joined Nykaa. Co-founder Naiyya Saggi stepped back from executive roles to start her own new venture, and Priyanka Gill, co-founder in charge of the group’s media business, left to join early-stage venture capital firm Kalaari Capital.

 

Key takeaways 

1. Good Glamm Group has postponed April salaries and has not fully paid laid-off employees, citing an ongoing fundraising effort.
2. The company faces a severe financial shortfall, and it is seeking to raise ₹250-500 crore at a near-zero valuation, wiping out existing investors.
3. Several directors resigned due to financial struggles, and high-profile executives, including co-founders, have left to pursue new ventures.
4. To manage cash flow, Good Glamm has sold brands like ScoopWhoop and Sirona Hygiene, while reducing marketing and scaling down operations.
5. The company reported ₹917 crore in losses for FY23, a sharp increase from the previous year, prompting urgent financial restructuring.