Startup Street: How An Acquisition Fuelled MyGlamm’s V-Shaped Recovery
This week on startup street, how an acquisition turned the tide for a cosmetic startup amid the pandemic. The Delhi is working on a policy to help students who want to start their own businesses; Maharashtra’s financial assistance to innovative startups that wish to file for patents; DPIIT’s global summit next year and Digiboxx’s plan to hire engineers. Here’s what went on...
A Beauty Startup, A Content Platform And The Pandemic
Business was running smoothly for cosmetics-making startup MyGlamm before the pandemic, which, for like most non-essential products, led to a sales washout. The recovery, however, was equally fast, thanks to an acquisition it made in August.
MyGlamm acquired women-centric ditial content platform POPxo for an undisclosed amount, welcoming 100 of its employees and 88 million unique female users. To put that into perspective, Facebook had 310 million users in India as of October 2020. Since Sept. 1, both companies have managed to integrate themselves in most ways — loyalty programmes, targeted branded content, pre and post consumption surveys — to harness POPxo’s strength in favour of the cosmetics brand.
“Since we’re able to target them that amplification is a lot more and we’re able to do it cost effectively because we’re able to do it through POPxo content which is why it’s coming more into visibility,” Darpan Sanghvi, founder and chief executive officer at MyGlamm, told BloombergQuint in an interview.
According to Priyanka Gill, MyGlamm was already successful but POPxo has been able to amplify that to a large degree. A British fashion journalist in her early days, Gill went on to launch POPxo in 2014. She is also co-founder and president at MyGlamm since the acquisition.
The startup’s revenue rate has jumped to Rs 200 crore per anum now, 40% above the pre-pandemic levels, according to Sanghvi, and is expected to reach Rs 400 crore in another four-six months. It has managed to reduce ad spends by 90% since acquiring POPxo, and added 1 million subscribers to the common loyalty programme — MyGlammXo since Sept. 1.
Besides, the company turned profitable in October, increasing investor interest. MyGlamm hoped to close another round of funding by January, the founders said.
Going All Out
“Cosmetics sales, surprisingly have been the same pre and post pandemic,” Sanghvi said, adding initial fears of a slowdown in sales of cosmetics because of work-from-home and masks were unfounded.
“It’s also psychological, right. A lipstick is an instant pick-me-up. It’s a very easy purchase you can do to change your mood,” Gill said.
On the other hand, personal care products have boomed as people find more time on their hands. MyGlamm launched two personal care sub-brands over the pandemic, which are already contributing to 25% of total revenue.
The startup has also launched a 3,000-square-feet flagship store in Mumbai, and calls it an “experience center” equipped with virtual technology that allows people to try on different makeup without physical touch, content creator booths, beauty masterclasses and a cosmetics development lab.
While the store currently receives only 15-20 visitors per day, their average spend stands at Rs 2,600 — higher than the Rs 1,800 average spend it sees in third-party stores like a Shopper’s Stop. Gill is further leveraging POPxo by using the ‘Beauty Creator’ programme (meant for beauty influencers) to turn the store into an advertisement in itself.
The founders refrained from disclosing the cost of establishing the experience center, much like the cost of the POPxo acquisition.
Working On Startup Policy For Students: Kejriwal
The Delhi government is working on a startup policy to help students who have excellent ideas and want to start their own businesses, according to Chief Minister Arvind Kejriwal.
Addressing the convocation at Ambedkar University on Wednesday, Kejriwal said everybody should have the target of being a job provider.
“It is important to get a job for the initial few years to gain experience but you should think about creating jobs for people and youth of the country. Students should also join politics and if people remain silent and stop participating in politics, the democracy will go for a toss. Every citizen must participate in politics,” he said.
“The students who would want to get into business now or after few months, I would want to tell them that we are bringing a startup policy to aid you all. I know many students who want to do business, they have excellent business ideas, but they don't know how to take the first step, who to take advice from, and how to arrange for finances and loans,” Kejriwal said.
“We are bringing a comprehensive startup policy for such students. We will provide legal and technical guidance, will aid the students in getting loans and subsidies to help them implement a business idea.”
Maharashtra To Provide Financial Aid To Startups
The Maharashtra government has decided to provide financial assistance to innovative startups that wish to file for patents, state Minister Nawab Malik said on Tuesday.
Addressing a press conference, the Skill Development, Employment and Entrepreneurship Minister said in the first phase of the scheme, 125 to 150 startups will be supported with financial assistance of Rs 2 lakh to Rs 10 lakh.
“In order to survive in a competitive world, it is important for startups and early-stage entrepreneurs to protect their Intellectual Property Rights,” an official statement said.
With the objective of spreading awareness and providing assistance for filing IPR application, this scheme aims to offer financial assistance of up to Rs 2 lakh for a domestic patent application.
Global Summit On Startups
The Commerce and Industry Ministry will organise a global summit on startups on Jan. 15 and 16 next year to promote growth of the sector, PTI reported quoting official aware of the matter.
Startups from Asian countries, domestic players and global entrepreneurs would participate in the virtual summit, the official in the Department for Promotion of Industry and Internal Trade said.
Prime Minister Narendra Modi is expected to address the participants on Jan. 16.
Global and domestic venture capital funds, regulatory authorities like the Securities and Exchange Board of India, Reserve Bank of India, Central Board and taxation agencies — CBDT CBIC — would also participate in the summit.
Digiboxx Plans To Hire 5,000 Engineers In Three Years
Online file storage and sharing services startup Digiboxx on Tuesday said it was looking to hire 5,000 engineers in the next three years.
The Indian startup is also aiming to have 10 million users in the next three years.
“We are planning to hire 5,000 engineers in the next three years. We are currently in double digit and an extremely agile and lean set up,” Digiboxx Chief Executive Officer Arnab Mitra said at the launch event of the service.
NITI Aayog CEO Amitabh Kant virtually launched the Digiboxx service and also registered as the first user of the company's service.
“This is indigenous innovation at its best. I have always maintained that the Indian tech industry can be globally competitive in all aspects and Digiboxx is such an example. Now most of India can store, save and share in India without fear of security threats and data localisation concerns,” Kant said.