DSG Consumer Partners closes its second fund at $50 million
Mumbai: Deepak Shahdadpuri-led investment firm DSG Consumer Partners (DSGCP) has achieved a final close of $50 million for its second fund DSGCP II.
DSG Consumer Partners, one of the first funds in the country to focus exclusively on the consumer space, has invested in firms such as payments firm Mswipe, specialty food ingredients maker Veeba Foods, greek yogurt maker Epigamia, online budget accommodation portal Oyo Rooms and tea chain Chai Point.
The firm raised its first fund DSGCP I in December 2012, which invested a total of $24 million in a portfolio of 21 companies.
DSGCP II was earlier targeting a close at $40 million. However, with significant demand from institutional investors such as the so-called “funds of funds” and family offices, the fund ended up raising an additional $10 million, said Shahdadpuri, founder, DSG Consumer Partners
The second fund has already committed capital to companies in India and South-East Asia such as Raw Pressery, Epigamia Yogurts, Salad Stop and Tazzo Bikes. In all, the second fund has committed close to $13 million across 11 investments.
DSG Consumer Partners invests at the seed or series A stage, with an eye on being the first institutional investor in companies. Typical ticket size of investment ranges from $100,000 to $1 million, and has the potential to invest $1-5 million over the lifecycle of an investment.
In addition to the final close of its second flagship fund, DSG Consumer Partners is also raising a new fund that will focus on investing in follow-on rounds (series B/C/D) of the best companies from DSGCP I, Shahdadpuri said.
“DSGCP I continues to perform exceedingly well. DSGCP Tyeb offers investors wanting later stage exposure to more mature companies, the opportunity to back the best performing and fastest growing from the first fund including Mswipe, Veeba, Eazydiner, Chope, Chaipoint and others. DSGCP Tyeb will only invest in a sub-set of DSGCP I companies in new rounds led by external investors,” he said.
Companies such as Mswipe, Veeba and others have seen new investors come in.
DSGCP Tyeb is looking to raise a total of $20 million. It has already achieved a first close of $16million, said Shahdadpuri.
“With the final close of DSGCP II and with the new fund DSCP Tyeb, the overall assets under management will increase to $95 million from $25 million,” he said.
The firm’s strong fundraising performance comes on the back of several exits and up-rounds that its portfolio companies have seen.
From DSGCP I, the firm has completely exited its position in Zipdial and Redmart. It has made partial exits from portfolio companies Oyo Rooms and Veeba Foods.
DSG Consumer Partners is very focused on giving liquidity to its LPs (limited partners) and takes money off the table quite regularly, said Shahdadpuri.
Its exit in Zipdial fetched the company 3.3 times the amount it invested, while the part exits in OYO and Veeba saw the firm generate returns to the tune of 11 and 6.5 times, respectively, according to Mint’s analysis.
Through its exits, the first fund has already realized $11 million of the original $12.5 million raised. About two dozen private equity industry executives are on the road to raise up to $2 billion for their new funds leveraging the emerging India story, according to a July 2016 report in Mint.