'Restructuring discussions underway': CEO Darpan Sanghvi on financial crisis at Good Glamm

Content-to-commerce unicorn Good Glamm Group's founder and CEO Darpan Sanghvi has revealed that the company is undergoing a severe financial and operational crisis, and is making efforts to resolve all issues.

In a LinkedIn post shared from the company's account, Sanghvi publicly acknowledged the beauty and personal care company’s ongoing financial crisis, salary delays, and operational disruptions, tracing it back to a failed acquisition deal late last year at the end of its funding cycle.

The founder said that the company was on the verge of selling one of its brands in a deal that would have secured its financial future, but the arrangement fell apart at the last moment after the acquiring firm’s CEO stepped down.

“It was a gut punch out of nowhere,” Sanghvi wrote, adding that the company had since scrambled to raise emergency funds to pay employees and keep the operations alive. His statement comes as former employees and vendors take to social media and legal forums over non-payment of dues.

"This set off a chain of financial strain resulting in salary disruptions and operational payment disruptions that directly impacted business and made generating cash flows hard. And raising money even harder," shared Sanghvi in the social media post.

The troubles started earlier this year after reports surfaced that the company was delaying salary payments for December, with some employees receiving only partial payments. A month later, it sold femtech startup Sirona back to its founders Deep Bajaj and Mohit Bajaj for an undisclosed amount.

It later also sold MissMalini Entertainment in a deal valued at Rs 6 crore. Along with that, the company also sold its digital media subsidiary ScoopWhoop to Bengaluru-based WLDD at one-fifth of its purchase price.

Over the years, the Good Glamm Group acquired several D2C beauty and personal care brands, including Sirona, MomsCo, and Organic Harvest. However, it faced difficulties meeting financial commitments to the founders and investors of these acquisitions.

Failing to deliver on its content-to-commerce model and liquidity issues, it was prompted to consider raising fresh funds at sharply lower valuations, triggering the exit of three of its directors from Accel India, Prosus, and Bessemer Venture Partners.

While Sanghvi did not share a timeline for the restructuring resolution, he said updates would follow as the company makes progress.

"It is my moral responsibility to resolve this for every past and present employee, and for every stakeholder (whether it's our lenders, vendors and our equity shareholders) and set things right, and I promise you: I will not stop until I do," he added.

(The story was updated to reflect additional comments from the LinkedIn post.)