Good Glamm Group And The Puzzling Bulbul Acquisition

The Good Creator Co, the influencer-focussed vertical of the Good Glamm Group (GGG), has announced the acquisition of social commerce startup Bulbul, as it looks to tap the latter’s tech and product capabilities.

As part of the deal, Bulbul’s cofounder Sachin Bhatia will join The Good Creator Co as its CEO. Bhatia will also get a cofounder status like other founders who joined the Good Glamm Group after acquisitions.

This makes Bhatia the ninth cofounder of the Good Creator Co, as he joins Malini Agarwal, Nowshad Rizwanullah, Mike Meli, Subrat Kar, Nishant Radia, Ajay Mishra, Rahul Singh and Nikhil Kumar, all of whom joined GGG after their startups were acquired by the unicorn.

After rebranding from myGlamm and marketplace operations to the Good Glamm Group and the house of brands model, GGG has focussed extensively on building up a content-to-commerce play, primarily through acquisitions.

Including Bulbul, The Good Glamm Group has acquired eight startups since 2022 alone. These include Sirona, Tweak India, The Moms Co, Organic Harvest, Winkl, Vidooly and ScoopWhoop.

But as we know these deals have not helped the company reduce its losses, and in the case of Bulbul, there are questions about whether this acquisition makes sense at all for Good Glamm Group.

Bulbul’s Post-Pandemic Pivot

Founded in 2018 by Sachin Bhatia and Atit Jain, Gurugram-headquartered Bulbul is primarily a video shopping app that sought to bring the teleshopping experience to smartphones. Since inception it has raised $17 Mn in funding from investors such as Info Edge, Sequoia and Leo Capital.

After the pandemic hit, the company decided to venture into the influencer marketing space with a new subsidiary named Aves Shopping Network Private Limited. It decided to give up on the video shopping operations to focus on this vertical.

It must be noted that Bulbul’s parent entity is Singapore-registered Bulbulive Shopping Network Pte Ltd, while the India operations are run by Bulbulshop Shopping Network Private Limited. The Indian entity is a 100% shareholder in Aves Shopping Network.

Reports about a potential cash-and-stock deal for the acquisition first emerged in February last year. According to a FE report in July 2022, the Good Glamm Group claimed it was in the “last stage” for the acquisition of Bulbul, but this has taken nearly three quarters.

Sources close to the development also told Inc42 that the deal took over a year. It’s also a year during which Bulbul seems to have hit a complete wall in terms of its financials.

On his LinkedIn profile, Jain claims to have exited Bulbul in January 2023, and also says he’s a small investor in Good Glamm Group (GGG). Jain’s exit was confirmed by the Good Glamm Group.

A GGG spokesperson told Inc42, “All Bulbul investors either got a cash exit or equity in the Good Glamm Group. As per protocol, we don’t disclose the deal size, but it is a cash and stock deal.”

Sources close to the development indicated that Sequoia and other investors have received minority stakes of around 1% as part of the automatic share swap terms. Info Edge and Sequoia declined to comment on the share swap.

The other major question is around Bulbul’s operations in the past two years, which was completely moved over to Aves Shopping Network. The company claims that since FY21, only Aves Shopping Network has brought in the revenue.

As seen in regulatory filings, the min Indian entity i.e. Bulbulshop Shopping Network did not earn a single rupee in revenue from operations in FY21 and FY22. We have to go back to FY20 (ending March 2020 or pre-pandemic) to find the last fiscal year when Bulbul reported revenue from this entity.

The Singapore-registered parent has not filed its financial statements for the past two fiscal years. But Inc42 was able to get some picture of BulBul’s operations from its India entities.

On the other hand, Aves Shopping Network reported operational revenue of INR 2.1 Cr in FY21 and INR 3.1 Cr in FY22. Aves also managed to improve its bottomline with losses falling to INR 26 Cr in FY22 from INR 46.8 Cr in FY21.

In FY20, Bulbul’s other Indian entity i.e Bulbulshop earned INR 2.55 Cr in revenue from ops, but ‘other income’ was nearly 2X this at INR 5.12 Cr. Further, in FY20, employee expenses stood at INR 4.6 Cr, but this subsequently fell to zero in FY21 and FY22.

As a result, the total loss for Bulbulshop fell from INR 11.4 Cr in FY20, to INR 5.8 Lakh in FY2021 and further to INR 63K in FY22. Essentially, Bulbulshop Shopping Network had completely stopped operations, and Aves Shopping Network had taken over.

Before Bulbul, Bhatia was one of the cofounders of Nasdaq-listed MakeMyTrip and also founded online dating app TrulyMadly. On the other hand, Jain had a stint as AVP at SAIF Partners (which now invests as Elevation Capital) after exiting from healthtech startup Pluss App.

“The acquisition of Bulbul will bolster GCC’s creator strategy and will provide deep access to the Tier-2 and Tier-3 demographics,”  Bhatia said in a statement adding that The Good Creator Co provides brands a programmatic way to run influencer marketing campaigns like they can through Google Ads.

The Good Creator Co claims that with this deal, it is doubling down on its creator-focussed app to enable influencers to earn more income through brand deals. The Good Creator Co app seemingly offers features such as income tracking, cost estimation and more for influencers. On Android, the app has 100K+ downloads according to the Google Play Store, but it has had a spate of 1-star reviews since January this year.

But the big question given the state of the company is whether this is simply a deal to acquire Bulbul’s video commerce tech. Given that the company was not paying any employees in the past two years, it’s not an acqui-hire. Secondly, the lack of revenue also means that Good Creator Co is not really getting access to monetised users through this deal.

Given that the likes of Trell, Meesho and ShareChat have largely moved away from live and video commerce, it can be argued that the model itself has lost any momentum that it gained through VC funding between 2018 and 2019.

So will this acquisition actually move the needle in terms of revenue and growth for Good Glamm Group? And why is a unicorn such as Good Glamm Group acquiring Bulbul?

In response, a Good Glamm Group spokesperson pointed to Aves’ revenue in FY22. The company said, “Bulbul’s GMV for FY21-22 was approximately INR 25 Cr and commissions and revenue was close to INR 3.8 Cr. Bulbul was acquired predominantly for its deep understanding of the influencer commerce space, tech stack and team. Bulbul’s business model is not being followed by Good Creator Co and thus the Bulbul historic financials do not have a bearing.”

Good Glamm Group’s Heavy Losses

That question is particularly relevant given that none of its past acquisitions have provided any real revenue boost to Good Glamm.

After shedding its MyGlamm name, GGG adopted a group structure with three separate verticals — The Good Brands Co, The Good Media Co and the Good Creator Co — each with a host of subsidiaries under their control.

Despite acquiring a bevy of companies and expanding its house of brands play and even venturing into large format retail, the Good Glamm Group is far from profitable and its revenue growth in FY22 paled in comparison to the rise in costs.

Founded by Darpan Sanghvi as a D2C brand called MyGlamm in 2017, the company has pivoted to a house of brands model after raising $150 Mn in its Series D round in November 2021. It counts the likes of Prosus Ventures, Warburg Pincus, Alteria Capital, L’Occitane, Bessemer Ventures, Amazon as its backers.

On a consolidated basis, the Good Glamm Group’s losses jumped by over 6X to INR 273 Cr in FY22 from INR 44 Cr in FY21. Revenue from operations surged by nearly 4X to INR 240 Cr in FY22, but total expenses ballooned 5.6X to INR 518.9 Cr, largely due to 6x higher ‘miscellaneous expenses’ and 4x higher employee benefits costs.

Also Read:  The Good Glamm Group’s Financials

From its acquisitions, it is clear that the larger goal for Good Glamm Group is to create a connected ecosystem for retail and ecommerce with a focus on creators, media and brands, but naturally such a holistic play requires significant capital for expansion, product development and managing operations.

Is the Bulbul acquisition a real step forward for Good Glamm Group or will the video commerce platform join the unicorn’s bevy of loss-making subsidiaries?

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