The parent of The Good Glamm Group, Sanghvi Beauty and Technologies, widened its losses by over six times in the last financial year owing to an increase in costs related to acquisition, cost of materials and employee-benefits.
The startup reported a loss of Rs 272.9 crore in the financial year (FY) ending March 2022, compared to Rs 43.6 crore in the previous year.
The content-to-commerce conglomerate is targeting to break even on a monthly run rate basis by 23 March and profitability by FY24, according to a person familiar with the matter.
The company did not offer a statement in response to VCCircle’s queries.
The Good Glamm Group, last valued at $1.2 billion, sells products related to beauty, cosmetics and skin care products under various brand names including MyGlamm, The Moms Co, St. Botanic. The D2C brand counts Darpan Sanghvi, Priyanka Gill and Naiyya Saggi as its co-founders. Last year, the company unveiled The Good Glamm Group under which it consolidated its various businesses.
The group’s total expenses surged by over 5.6x to Rs 519 crore in FY22, compared to Rs 91.22 crore in FY21. Purchases of stock-in-trade or purchase of finished goods, employee benefit expense, and miscellaneous expenses accounted for a large part of the business.
These miscellaneous expenses, a mix of costs related to acquisitions, technology, and marketing, grew six-fold to Rs 217.9 crore in FY22. In FY21, this number was Rs 35 crore.
The group has spent about $270 million on about 11 acquisitions since 2021 to fuel its growth plans. During the year, the company bought stakes in D2C brand The Moms Co., personal care brand St Botanica, celebrity talent management platform MissMalini Entertainment, personal care company Organic Harvest and digital media platform ScoopWhoop among others.
The company is eyeing more acquisitions, which it expects to close in the coming months.
As ad-scale starts kicking in, the company expects these expenses to come down, according to the above source.
The company’s employee-related expenses grew four-fold to Rs 1460 crore in FY22, compared to Rs 34.9 crore in FY21. Correspondingly, the team has also grown to nearly 1500 people from 200 in April 2021.
The company’s revenue from operations grew nearly five-fold to Rs 240.03 crore in FY22, compared to Rs 49.32 in the previous year.
The company is already at a run rate of Rs 800 crore for FY23 and expects to close at 4-5x growth over FY22, according to source.
VCCircle has reported that the company is planning to raise a new round of funding at a valuation of over $2 billion. It had last raised $150 million in its Series D round of funding co-led by marquee investors including Prosus Ventures and Warburg Pincus in 2021.
In July this year, it restructured its business reorganised into independent brands, media and creator division–Good Brands Co., Good Media Co., and Good Creator Co. The company set up an international business division to sell its products in the West Asia and Southeast Asian markets, earmarking Rs 100 crore.