Consumer brands focused early-stage investor Fireside Ventures announces fund close of Rs 340 Cr
The fund has also announced an Advisory Board comprising Amazon India Head Amit Agarwal, Marico Founder and Chairman Harsh Mariwala and Bain & Company India Chairman Sri Rajan.
Early-stage consumer-focused venture fund Fireside Ventures is looking for startups that will cater to Anya and Aarav.
Who are Anya and Aarav you ask? They are creations of Fireside who represent, according to the fund's Founder Kanwaljit Singh, the new millennials and are central to the story of new age consumer brands. The new millennials are those who want to buy healthy, want to indulge but face a paucity of time and want products that fit their lifestyle. Importantly, they are willing to pay a premium.
In an ecosystem obsessed with tech startups, Fireside is an exception. Set up by former Helion Venture Capital Senior Managing Director Kanwaljit Singh, Fireside Ventures is focused on early-stage consumer brands. The venture fund had announced first close of Rs 180 crore in May 2017 and has now announced final close at Rs 340 crore.
The fund has got on board some marquee names as limited partners including Unilever Ventures, ITC Ltd, Emami, Hero Enterprises, Sharrp Ventures (the Mariwala family office), Premji Invest, and Westbridge Capital.
The fund has already made 10 investments in consumer segments like food and personal care. Fireside's portfolio includes startups like food brand Samosa Singh, babycare brand MamaEarth and personal care brand Bombay Shaving Company.
Fireside intends to follow the 1-4-10 model, where it will invest Rs 1 crore in a seed round, Rs 4 crore once the investee company has shown proof of concept and is beginning to scale and Rs 10 crore at the growth phase.
"This is an exciting time to build new-age brands. Apart from the larger macro trends, we also see micro trends like low innovation by large players. We see great opportunity for disruption," says Kanwaljit, who has industry experience at Hindustan Unilever and was Head of Marketing at Intel before he switched over to the venture capital industry.
Apart from the Advisory Board, Kanwaljit has also got on board two partners. Vinay Singh, who was Founder and CEO of Stepni.com, which was acquired by Quikr, and VS Kannan Sitaram, who was earlier COO at Dabur India, have joined Fireside.
The premise of the fund is that there is a large white space for innovative brands in emerging and premium segments. Kannan says in India even an addressable market that is two percent of population translates into a large segment in absolute numbers.
Kanwaljit and his team believe that consumer brands need a different approach in terms of product and brand building and go-to-market strategy and hence the need for a specialist fund.
Kanwaljit says the time is right for consumer brands because the enabling ecosystem has finally come together. The growth of online commerce has created a relatively accessible distribution channel. It is less expensive to reach out to potential consumers now thanks to social media. New business models like subscription have found takers. Modern retailers are also open to putting up new brands on their shelves. The rise of contract manufacturing and the ability to outsource non-core functions like digital marketing are also acting as enablers.
The fund's vision is to create 25 iconic brands in 15 years.
The fund and the many startups that are coming up in the consumer space are all attracted by the $900 billion retail market that is expected to grow to $1.1 trillion in the next two years. The rise of ecommerce has helped many companies reach out to customers relatively easily as online retail does not need master distributors and does not have barriers like listing fees and limited shelf space, unlike modern offline retail. Initiatives like Amazon Launchpad, through which the e-tailer is highlighting products of over 250 Indian startups, has also helped.
However, many startups have realised that they need to be offline if they need to scale and that is fraught with challenges. They need to compete with large brands for the limited wallet share of Indian consumers.
Kanwaljit says a support ecosystem, like the Advisory Board he has created, is required to help consumer brands scale up. "A strong foundation of different building blocks is needed. Then you can build a sustainable business for many years," he says.