Good Glamm: Story of a cash crunch, a fundraise, and the exit of three directors

livemint.com:

Subscribe to enjoy similar stories. A severe cash crunch at the Good Glamm Group that forced it to consider raising fresh funds at a sharply lower valuation triggered the exit of three of its directors, three people aware of the matter said, since a new round will wipe out their shareholding given their disinclination to bring more money. The three directors from Accel India, Prosus and Bessemer Venture Partners stepped down from Good Glamm's board across November and December.

Good Glamm is planning to raise capital at a very low valuation which would overhaul its cap table, the people cited above said on the condition of anonymity, as some shareholders are not keen to participate. This 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.

"They (the Good Glamm investors) tried everything, including finding a buyer. Now, it is a function of risk-reward — it doesn't make sense to put more money now", one of the three people said, adding the fund-raising would be at "punitive terms" to existing investors. The directors who quit were also worried about the potential impact of the restructuring on their other portfolio companies, both in terms of reputation and regulatory issues, the person added.

Detailed emailed queries to the spokespersons of Accel India, Bessemer Venture Partners, Prosus and Warburg Pincus remained unanswered. Last March, investors brought around $30 million as part of a rights issue, but the business expansion didn't pan out as anticipated. The direct-to-consumer