Stage: Seed, Series A
Target fund size: $45 million
At 53, Kanwaljit Singh is starting a new venture capital firm for the second time in a decade. This time around, though, he’s a little bit more excited than the last time. Fireside Ventures, his firm, currently on the road to raise a Rs300-crore (about $45 million) maiden fund, takes him back to his roots—consumer businesses of the non-technology variety.
“I believe consumer brands are the new emerging trend and provide an alternate investment opportunity to technology investing," Singh told MintAsia on the phone from Bengaluru, where he is based. “I realized the DNA required as an investor is quite different and, therefore, decided to focus on this as an exclusive space. This belief and passion probably comes from being in the FMCG (fast-moving consumer goods) sector for a large part of my career early on," he said. Before becoming a venture capitalist, Singh spent 10 years at FMCG major Hindustan Unilever Ltd and then about three years in marketing at chipmaker Intel Corp.
About 11 years ago, when India’s venture capital market was practically non-existent, Singh reckoned that it would be a good idea to blend his passion for non-technology consumer businesses with technology ones. He quit his job as a director with The Carlyle Group and teamed up with Daksh eServices founder Sanjeev Aggarwal, Silicon Valley-based serial entrepreneur and angel investor Ashish Gupta and, former Walden International executive Rahul Chandra to start Helion Venture Partners, one of India’s oldest homegrown venture capital firms.
The bid to combine non-technology start-up investments with technology start-up investments met with limited success at Helion. In late 2014, Helion decided to shift gears to pure technology investments and Singh quit to go his own way. The experience, however, didn’t dampen his passion for non-technology consumer businesses. Rather, he decided to double down on investments in such start-ups. Fireside was born about two years ago as Singh’s family office and is now an investor in over a dozen consumer start-ups. Some of the better known ones in the portfolio include Hector Beverages, which owns packaged beverages brand Paperboat; Drum Food International, which retails ice cream under the Hokey Pokey brand, and online meat and fish store Licious, owned by Delightful Gourmet.
“It was clear to me at the time that the market had started to change in favour of homegrown consumer brands. When I say consumer, I mean FMCG-type of businesses. The local ecosystem and infrastructure around these businesses has matured to the extent that now one doesn’t need tens of millions of dollars to achieve scale," says Singh. He thinks that the combination of new distribution and marketing models and high-pedigree entrepreneurs offers a classic inflection point for the creation of such consumer businesses in India.
Having proved his investment thesis, Singh thinks that the time is now right to go out and set up a specialist venture capital firm focused on home-grown consumer start-ups. He stopped making investments through the family office about 4-5 months ago and will make future investments through the new Fireside fund. At present, he’s raising commitments for the fund from domestic investors and has already received commitments worth Rs100-120 crore from local family offices. Investments from the fund will continue the strategy he’s followed in the past couple of years—invest in tranches of Rs1 crore, Rs4 crore and Rs10 crore over the life of a company.
Anything else he’d like to do differently from his previous outing in the venture capital business? “Bring younger people on board, establish clear growth paths to becoming partners… the vision is to build an institution that outlasts me," he says.