Due to mounting losses, D2C Unicorn Mamaearth will reportedly close down Momspresso MyMoney, an influencer engagement platform. The company is reportedly set to go public soon.
Mamaearth acquired Momspresso in 2021 for INR 152.3 crore, with Momspresso operating three verticals – a user-generated content platform, brand marketing, and MyMoney.
Sources indicate that Momspresso’s management, including the co-founders, informed employees during an April town hall meeting about the decision to shutter MyMoney. According to sources, the platform has experienced declining sales since its acquisition by Mamaearth.
In addition to closing MyMoney, Mamaearth is expected to shut down Momspresso’s brand marketing business. Multiple sources report this. This move resulted in the recent layoff of around 80-100 employees in tech, content, customer service, marketing, and product roles at Momspresso.
The decision to shut down these loss-making verticals is believed to be influenced by Mamaearth’s upcoming IPO. The company aims to streamline its operations and focus on profitability as it prepares to go public.
Despite efforts to reach out for comments, emails sent to Mamaearth and Momspresso co-founder Vishal Gupta remained unanswered. Additionally, Momspresso’s MyMoney app is no longer available on Google PlayStore, while the iOS app reportedly suffers from glitches.
Sources reveal that Momspresso had undertaken a restructuring exercise in December 2022 to reduce costs. The recent closures and layoffs are part of the ongoing efforts to streamline operations and optimize resources.
The above sources indicate that Gupta and co-founder Prashant Sinha have started a new marketing agency. There they have hired a dozen employees who were laid off from Momspresso. The marketing agency began its operations last week. The acquisition of Momspresso was initially aimed at expanding Mamaearth’s content and influencer management capabilities.
Mamaearth, founded in 2016 by Vishal Gupta, Prashat Sinha, and Asif Mohammed, focuses on providing parenting tips and pregnancy advice to mothers. It offers content generated by women in English, Hindi, and eight regional languages, catering to a diverse audience seeking guidance in their parenting journey.
Early in March this year, the company decided to put its initial public offering (IPO) on hold due to unfavourable market conditions. The company had planned to raise $200 million to $300 million through the issuance of new equity and an offer to sell existing shares, which could have valued it at up to $3 billion. However, given the current turbulence in global stock markets and concerns about the financial stability of banks, Mamaearth’s parent company, Honasa Consumer Ltd, has chosen to adopt a “wait and watch mode.”
In 2019, Momspresso introduced MyMoney, a platform allowing individuals to work as micro-influencers for brands. Users could participate in marketing campaigns and share relevant content on their social media accounts. Additionally, Momspresso’s brand marketing vertical served as a third-party agency, creating video and article content for brands.
The Momspresso Acquisition
Mamaearth’s acquisition of Momspresso in December 2021 revealed that the net value of Momspresso at the time was INR 16.2 Cr. Mamaearth obtained a majority stake in Momspresso for INR 152.3 Cr. As stated in the DRPH, Mamaearth allocated INR 136 Cr as “goodwill arising on acquisition.”
In FY22, Momspresso reported a significant loss increase, which widened 42 times from INR 25.7 Lakh in the previous fiscal year to INR 10.9 Cr. However, its revenue experienced a modest growth of 1.1 times, reaching INR 31.2 Cr compared to INR 27 Cr in FY21.
Apart from Momspresso, Mamaearth expanded its holdings by acquiring two more businesses: Dr Seth’s and BBlunt. These acquisitions showcase the company’s commitment to diversifying its portfolio and broadening its presence in the market. The strategic moves aim to strengthen its position as a prominent player in the parenting and beauty sectors.