Online beauty brand MyGlamm has acquired women-focused content and influencer business POPxo.
Priyanka Gill, founder of POPxo, will join MyGlamm’s board and will be designated cofounder of the combined entity. The terms of the transaction were not disclosed.
The deal is expected to reduce MyGlamm’s customer acquisition costs, which is one of the highest cost centres for a direct-to-consumer brand. It will also net the venture a wider set of consumer data, which will help it launch new products more effectively.
“Till date, we only engaged users after acquiring them…. But POPxo will help us widen the top of the funnel,” Darpan Sanghvi, founder of MyGlamm, told ET.
“We have about 50 million women users across platforms, and close to 99% users are organic,” Gill said.
MyGlamm’s revenue peaked at Rs 12 crore in February, but offline sales, which constitute about 40%, took a hit over the last few months due to the Covid-19 pandemic. However, the joint entity projects to scale MyGlamm to Rs 34 crore a month by December 2021.
POPxo will continue to run its platform independently with a forecast Rs 4 crore a month in revenue by the same period.
Once the synergies of the deal start playing out, the company plans to raise capital jointly in October. “We are nearing profitability and will engage with private equity investors once the merger traction starts reflecting,” Sanghvi said.
Startups in the beauty and personal care space have attracted significant investment over the last 18 months, with most players showing a three-to-five times growth in revenue through online-led distribution, according to a report by consulting firm Kearney.
According to Sanghvi, the early signs of the first such joint exercise with POPxo has shown results.
The two firms launched a hygiene care brand – Wipeout – leveraging the POPxo distribution network and MyGlamm’s manufacturing and distribution. The partnership helped scale the brand to Rs 2 crore in a month, which would have otherwise taken MyGlamm six months to achieve independently, he said.
“Within the first week, we reached 8 million users…Wipeout alone can become a Rs 8 crore brand by October…the online buzz also helps create offline momentum,” Sanghvi said.
While POPxo will discontinue its own private brands, the combined entity will work jointly to launch newer brands, Gill told ET.
MyGlamm competes with Sugar Cosmetics, Nykaa’s private label as well as ColorBar Cosmetics, Wow Skin Science and Faces, across categories.
MyGlamm Products was founded in October 2017 and has since raised $20 million from L’Occitane, Bessemer Venture Partners and the Mankekar Family Office.
Founded in 2015, POPxo has raised more than $10 million from investors such as Kalaari, Chiratae and Neoplux.
MamaEarth has raised $18 million from Sequoia India, while Sugar Cosmetics raised about Rs 60-Rs 70 crore from A91 Partners last year.
Wow is in talks to raise its first institutional round, pegged at $45-$55 million from Everstone, ET reported earlier this week.