Good Glamm directors quit ahead of stake-wiping round

Co plans to raise capital at a very low valuation, which would overhaul its cap table

- Ranjani Raghavan, Sneha Shah & Sowmya Ramasubramanian

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.