Meet the VC who plans to invest Rs 300 crore in Indian consumer brands

The rising growth potential of startups in the consumer brands segment, lack of sufficient venture capital funds in the non-technology space and limited appetite of individual investors, led to the launch of Fireside Ventures, a consumer-focused venture fund, according to founder Kanwaljit Singh.

Fireside Ventures is an AIF (alternative investment fund) Category I fund which on Monday announced a fundraise of Rs 180 crore from investors including Premji Invest, Mariwala family office, WestBridge capital, RP-Sanjiv Goenka group and Emami Ltd.

It plans to raise Rs 120 crore more, in the next couple of months which will see participation from the existing as well as new investors.

Fireside is not Singh’s first fund. He co-founded Helion Venture Partners earlier.

Singh who has a penchant for consumer brands quit Helion in 2014 when the Gurgaon based fund decided to focus mostly on technology startup investments.

Post that Singh set up his family office under the name Fireside Ventures.

Through his family office, Singh has invested across multiple start-ups including Hector Beverages which sells packaged beverages under the brand name Paperboat, ice-cream brand Hokey Pokey (Drum Food International), baby skin care products maker Mama Earth among others.

Bridging the Rs 5-10 crore fundraise gap

According to Singh, the real pain point for consumer startups in India comes when they have to raise a second round of fund, to the tune of Rs 5-10 crore.

He says that there are a lot of angels and high net individuals who participate in rounds of around Rs 1 crore. Then there are traditional venture capital funds in India. But most of the venture funds in India are currently focusing on technology startups.

“When you want to raise Rs 5 crore what are the choices you have -- either you go to a high net individual. Angels will mostly do a round with around Rs 25-30 lakh each of investments… it gets very difficult to manage. I realised there is a gap in the market for Rs 5-10 crore kind of a space. That then required me to think of an institutional fund concept because I personally was not able to write those kinds of large cheques for many companies. I could do one off,” Singh told Moneycontrol.com

Avendus Capital is the exclusive advisor-partner for Fireside Ventures in the fund raise.

Kanwaljit is joined by Vinay Singh, who has over 10 years of experience in consumer brands, in the digital marketing space and as an entrepreneur. He has worked at Hindustan Unilever and Bankbazaar.com and was cofounder of Stepni.in which he sold to Quikr.

Fireside will focus on consumer brands to be built in India over the next decade. Since there is a shortage of quality consumer brands in India, there is significant interest from large strategic players in this space to acquire smaller brands that provide profitable exits to investors. This is where Fireside plans to bridge the gap.

“Kanwal’s thesis on the evolution of consumer brands resonated with us, as well as with the entrepreneurs and families that we work with. We believe this association will give both, our clients and us, the opportunity to grow with this rising trend and play a meaningful part in this wave,” said George Mitra, chief executive officer, Avendus Wealth Management Pvt. Ltd.

The newly raised fund will invest across sectors like food and beverages, personal care, home products etc. The ticket size will be in the range of Rs1-5 crore but will also look at follow on rounds across the portfolio companies to the tune of Rs 15 crore.

priyanka.sahay@nw18.com