Bengaluru-based 10club, a company that acquires young ecommerce product sellers and scales them up, has raised $40 million in one of the largest seed-funding rounds for an Indian startup.
The equity and debt round was led by Fireside Ventures, a backer of brands such as boAt earphones and skincare brand Mamaearth and an international investor in the space whose name was not disclosed.
Other investors include Heyday, a US-based startup running a similar model, Class 5 Global, an American micro VC firm, logistics player PDS International and Secocha Venture, an investment firm led by Fevicol-maker Pidilite’s Sanket Parekh, the startup said on June 29.
10club, which follows the widely successful model of the US-based startup Thrasio, was founded in late 2020 by Bhavna Suresh, Class 5 Global’s Joel Ayala and Deepak Nair.
Suresh was earlier the CEO of Philippines-based real estate marketplace Lamudi. She had originally planned to start up with former Uber executive Utsav Agarwal, who later left to start his own Thrasio-style venture Evenflow as reported by Moneycontrol.
10Club has already acquired a seller of baby blankets, and is eyeing deals in the sectors such as kitchen appliances, organisers, food and beverages, sports equipment and spectacles, CEO Suresh told Moneycontrol.
“Fashion is the one space we’re avoiding for the moment, because seasonal trends are not our thing and other spaces have a massive opportunity,” she said.
Thrasio-style startups have taken the Indian startup and venture capital seen by storm, with 10 players raising $300 million for these firms—most of them based on mere ideas.
These startups are betting that the next defining consumer brands in India could come from Flipkart and Amazon sellers.
10Club’s pitch is to acquire a startup and help it scale ten times—hence the name 10Club—in three years or so. It plans to accelerate this growth by integrating supply chains, providing performance marketing expertise and using data analysis to drive insights.
Also read: $300 million, 10 startups and a dream: Decoding the secretive Thrasio-model by Indian startups
The success of these companies depends on the space they target, quality of sellers, valuations they buy at, availability of debt and the relationship they can build with the entrepreneurs whose companies they acquire.
“India is a people game. It is not just about top line margins but founder chemistry. You have to work with the entrepreneur and there has to be understanding and trust,” Suresh said.
Some of these sellers can also sell abroad—in other Asian or even European and American markets, something that these startups are betting on to deliver growth targets.“India and online-first brands are at the cusp of the next revolution. We, at Fireside, believe that both VC and acquisition driven models will co-exist going forward and can turbocharge the growth of early-stage brands. Together with the team at 10club, we will be able to drive this change and enable e-commerce entrepreneurs to realize the full potential of their brands,” said Vinay Singh, partner at Fireside Ventures.