Mamaearth, a Direct-to-Consumer (D2C) unicorn preparing for an initial public offering, has implemented employee layoffs within its parenting content platform, Momspresso. The brand marketing vertical of Mamaearth has witnessed a reduction of 80-100 employees.
As reported by The Hindu Business Line, Mamaearth secured a majority stake in the parenting platform Momspresso for ₹152.3 crore in 2021. Presently, Momspresso operates three business segments, including a platform for user-generated content in the form of blogs, brand marketing services, and MyMoney, which serves as the influencer engagement platform for Momspresso.
According to sources, the company has decided to close both Momspresso and MyMoney by the end of this month. The decision to shut down these ventures stems from the increasing losses incurred by MyMoney.
According to Mamaearth's Draft Red Herring Prospectus (DRHP), the net value of Momspresso, after deducting liabilities from assets, stood at ₹16.2 crore during its acquisition in December 2021.
In the financial year 2021-22, Momspresso experienced a significant increase in losses, widening by 42 times to ₹10.9 crore from ₹25.7 lakh in the previous fiscal year. On the other hand, the revenue of Momspresso witnessed a modest growth of 1.1 times, reaching ₹31.2 crore compared to ₹27 crore in FY21.
The Direct-to-Consumer (D2C) brand, which had submitted its IPO filing in December of the previous year, postponed the initial public offering in March due to unfavorable market conditions. Founded in 2016 by the couple Varun and Ghazal Alagh, the skincare start-up has received backing from notable investors including Sequoia Capital and Belgium's Sofina.