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Exclusive: Mensa Brands could be India’s fastest unicorn 

Amid an epic funding boom, former Myntra CEO Ananth Narayanan's Mensa Brands could be India's fastest unicorn- zero to a billion dollars in barely six months

Mumbai / October 04, 2021 / 08:08 AM IST

Zero to one billion dollars in less than six months- Mensa Brands, started by former McKinsey partner and Myntra CEO Ananth Narayanan is in talks to raise funds at a billion dollar valuation, less than six months after it launched, said three people aware of the matter, requesting anonymity.

Mensa is building a house of brands by acquiring online sellers in the apparel, home appliance, personal care and beauty space, similar to US-based breakout startup Thrasio, which in two years was valued at $4 billion and profitable.

Mensa is in early stage talks to raise $200 million from investors, including Accel Growth- the US-based fund which cuts larger cheques. Another new investor may join the round in addition to existing investors Accel India, Norwest Venture Partners, Falcon Edge Capital and most recently Tiger Global Management. The round may value Mensa at a billion dollars, making it India’s fastest startup to become a unicorn- surpassing blue collar worker hiring platform Apna, which took a little less than two years to reach the mark.

Terms of the deal- which will be worked out in the next two months- could still change, sources said. Mensa declined to comment while Accel did not respond to queries seeking comment.

“It is a very aggressive bet by investors based on a rosy outlook. Investors are saying they want to come into good companies no matter what the price,” said one person aware of discussions.


Moneycontrol first reported on August 2 that Tiger- also an investor in a direct competitor, GOAT Brand Labs- is in talks to back Mensa. According to regulatory filings, Tiger invested $10 million at a valuation of about $250 million last month- four times higher than its previous valuation. 

Ecommerce roll-up firms, built solely to acquire other companies, have emerged as one of India’s hottest startup spaces. Over $500 million could be invested in the sector this year- most funding rounds based on acquisition timelines and nothing more. Another rollup firm GlobalBees, co-founded by FirstCry’s Supam Maheshwaris in talks to raise $100 million led by SoftBank, Moneycontrol reported last week.

These companies promise capital, hiring expertise, technological chops and marketing savvy to turbocharge the growth of online sellers on Flipkart, Amazon, Nykaa and other platforms.

Mensa has inked deals- or Letter of Intents (LoIs) with about 25 sellers to acquire them, one person said. Some of these deals are as big as Rs 150-200 crore. E-commerce rollup firms also raise debt because acquisitions are more expensive with equity. Mensa has raised debt from Alteria and InnoVen Capital, and may raise more.

“This valuation is based entirely on promise. Investors are betting that Ananth can out-execute and out-choose others when it comes to picking brands and working with them,” a person said.

Narayanan, one of India’s best known startup executives, launched Mensa after selling online pharmacy Medlife to larger rival PharmEasy last year.

“I have always been a believer in brands. I think there are three things that are happening in India. The first is e-commerce and sales through online channels, which will continue to grow for the next 10 years at 30 to 35 percent year-on-year. Second, as India becomes more prosperous and content becomes more available, Indians are moving from unbranded to branded in almost every segment,” Narayanan told Moneycontrol in an interview earlier.

 “Third, I fundamentally believe that the skills it takes to scale a digital brand are something that's relatively new, right? So, with all of these, we felt it was the absolute right time to get into the brand space and see if we can partner with the right founders and scale and grow the brands,” he added.

India has seen an unprecedented startup funding boom, as the Covid-19 pandemic has turbocharged digital adoption, brought new users to the internet and attracted cheap capital from the US and other countries, where due to low interest rates, investors are seeking high-return riskier bets in emerging markets.

Startups have raised over $20 billion this year, nearly double the previous record, with no signs of the boom abating. Many of these companies are capitalising on an unusually aggressive market, raising capital but planning to spend it cautiously so that they can see out a funding downturn with no issues.
M. Sriram
first published: Oct 4, 2021 08:08 am

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