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Consolidation may be a norm in the beauty service industry with offline players buying out online tech-enabled counterparts, but start-ups like MyGlamm and BigStylist still believe in raising funds and sustaining their independent operations to become profitable in this space.
While MyGlamm has recently raised a bridge round from its existing investor, L’Occitaine, Infoedge-funded BigStylist is still scouting for its next round of funds and hopes to close a deal in the next two-three months.
Darpan Sanghvi, Founder, MyGlamm, is clear about not being part of an offline model and believes he can continue his tech enabled beauty services, having raised $9 million till date from investors like Tano Capital and global beauty firm, L’Occitane.
“When we raised our recent bridge round, we had a valuation between $45 million and $105 million. Our next round should happen next year, which should be more than double the amount we have raised so far.
“Online and offline are two different models and there is no reason for us to be part of this consolidation trend,” says Sanghvi. The 18-month-old MyGlamm will be keen to have strategic investors which could include international beauty companies as well as PE and VC funds as part of its fund raising next year.
“We are the largest player since we already have presence across 12 cities with a GMV of ₹18 crore and with the kind of valuation we already have, we should raise a larger amount which should be our Series B to C round next year,’’ he added.
The other player, BigStylist, is also resisting being part of the consolidation wave in beauty services.
“Today, there may be just MyGlamm and ourselves but we are not looking at consolidation. Our focus is now going to be on raising Series A of $4-5 million in the next two-three months,’’ says Chinmaya Sharma, Co-Founder, BigStylist. Infoedge has been the sole investor in BigStylist which has helped raise $2 million (₹12 crore) so far.
The survival of independent start-ups in beauty services will depend on their respective business models.
“Unlike MyGlamm which has a franchise model, players like BigStylist will face challenges as it does not have a hub and spoke model. Besides, running an online model has huge training, logistics and time management costs which these start-ups may not be able to bear,’’ observes Vikram Bhat, Founder, Enrich Salons.
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