Beauty and personal care giant Good Glamm Group has been consistently making it to the headlines in the recent past with a hoard of acquisitions and fundraises. Group Founder and CEO Darpan Sanghvi exclusively speaks to VCWorld, which is th Venture Capital community of BW Businessworld on about the idea behind the company’s several acquisitions, its IPO target by 2023, and its content-to-commerce strategy.
‘Digital CPG Conglomerate of the Future’, the Good Glamm Group has earmarked INR 750 crores to scale and acquire brands that millions of users will love. Can you tell us a bit about your acquisition plans in the future? Are you looking at acquiring more D2C brands?
In 2021, we completed acquisitions worth Rs 2000 crore which included INR 750 crores in cash and the balance in stock swaps and earnout. We acquired DTC brands such as The Moms Co, St. Botanica, and also made a strategic investment in Sirona Hygiene, and acquired Digital Media and Influencer Marketing companies such as ScoopWhoop, MissMalini, Winkl and Vidooly. Good Glamm Group is working towards building South Asia’s largest Beauty & Personal Care conglomerate for which the group will hold a portfolio of brands cutting across categories from cosmetic, haircare, skincare, mom and baby, grooming, naturals, hygiene, organic and a few more. We will continue to acquire or make strategic investments towards completing this portfolio and scaling the brands under the Good Glamm Group umbrella.
How much revenue should these D2C companies be generating?
We like to acquire companies that are doing revenues of between 50crores to 200 crores and then leveraging the Content to Commerce infrastructure of the Good Glamm Group to scale each of these brands to Rs 500cr in revenue.
Are you signing any Term Sheets with D2C brands in the first quarter of 2022?
Yes, we expect to complete more acquisitions in the first quarter of 2022.
The brand recently broke into the unicorn club, at a valuation of $1.2 billion. Can you tell us a bit about the inorganic growth trajectories which are devised by the company?
With our unique content-creator-commerce moat we are looking at setting new and higher targets for ourselves every quarter. It is because of the success of our business strategy so far we have been able to achieve and scale up as a group through a mixture of organic growth and acquisitions and strategic investments. We are at a $150mil current revenue run rate and are projecting a $250mil run rate by March 2022. We have set a target for each of our brands, digital media companies and Content creator assets to build and grow further which stems out of the content-to-commerce strategy that began in August 2020 when we made our first acquisition with POPxo and Plixxo.
How big is the market for beauty products in India and how many companies do you think can co-exist?
The Beauty and Personal Care market in India is $24 Billion in 2021 and the market will grow annually by 5.61% CAGR 2021-2025. It’s a space where many brands can exist and succeed, however it is extremely important to establish a USP/ differentiator to make consumers understand why they should choose you. This is not a winner-takes-all market. There are lots of opportunities for newer brands to come in because India has had very few brands historically and consumers are hungry to discover new brands and thus the opportunity is there today for newer brands.
What is Good Glamm’s strategy to ensure that the acquisition it is making turns out to be successful? Are there any specific approaches adapted by the company to ensure a successful implementation?
People are the most important part of Acquisitions and integration. It is strategy meeting emotions — not easy. I am super cognizant of that. I do a lot of things to make sure that the process is smooth. Even before we find the deal, we actually sit together, figure out each one’s expectations, and want to make sure that everyone is aligned. We make sure that the financial incentivization is correct where we are all working towards a common goal and there is no disconnect over there. We never ever cut the team. The team is always taken care of. The founders are super important to us. We don’t do deals if the founders are not staying with us at least for a couple of years to scale up the brand. In addition to this softer aspect, we then have our well set process of getting the synergies activated – this includes getting DTC activated through our Content to Commerce engine, getting Offline retail activated through our Retail infrastructure, and getting cost synergies in place through centralized sourcing and supply chain. All of these activities are designed to grow an acquisition 300% in the first 12 months.
Are you targeting an IPO by 2023? How much do you plan to raise? What is the valuation you are targeting?
We are in no rush to list our IPO. I am a firm believer that I should be generating serious cash before we IPO. By Diwali 2023, we are hoping to get to the Billion Dollar Revenue scale and be significantly profitable. At that point, I think we will be IPO ready.
Where do you aim to position Good Glamm by the end of 2022? Are there any certain future plans for expansion?
Good Glamm Group is South Asia’s largest Content to Commerce company with a vision to become the global ‘Digital first FMCG Conglomerate of the Future’. Good Glamm Group has South Asia’s largest proprietary portfolio of innovative and fast growing beauty and personal care brands along with a proprietary portfolio of South Asia’s largest digital media and creator assets. We are looking to continue investing in product development, support data science and technology research, increase offline expansion, fund working capital requirements while also expanding the content creation capabilities in Good Creator Co. and increase the digital reach of POPxo, Plixxo, BabyChakra and ScoopWhoop. The Group will also continue to make investments in more beauty & personal care brands and digital media and content creator companies, where it sees a gap is to be filled. And in the second half of 2022 we aim to make our international foray. We are targeting to be at a $600 million revenue run rate before the end of 2022.