Nikhil Kamath-backed Gruhas, Collective Artists launch fund for consumer firms

GCCF will raise and deploy ₹150 crore initially, with both Gruhas and Collective Artists contributing an equal amount to the fund, and subsequently securing additional fund from external sources. The fund will seek to sustain an average deal size of about ₹8 crore ($1 million).

“This is the very beginning and, initially, we will raise and deploy about ₹150 crore. It will likely scale significantly with time," said Kamath, also the co-founder of online stock trading platform Zerodha.

“It’s not a proprietary fund. Both partners will invest equal capital, and we will also have third-party capital, which we will be deploying." he added, highlighting the collaborative nature of the fund.

GCCF will primarily focus on identifying, mentoring and investing in promising startups and creators from diverse consumer industry segments.

Vijay Subramaniam, group chief executive and founder of Collective Artists Network, said the fund's first few companies have been selected from the wellness, beverages, fashion, lifestyle, hospitality, and mothercare sectors.

“The broad idea is to invest in addressable consumer space. The purpose is to power overall consumption. So if there is a business which has the right fundamentals, we are happy to look at it," he added.

A little over year ago, when Subramaniam met Kamath the initial conversation was around connecting India’s Silicon Valley (Bangaluru) and entertainment capital Mumbai.

“If you see, there is no organized connection between media and entertainment business with venture capital. It has never happened. We shook hands on that one-line thesis to come together to form probably the most-effective network capital fund in India directly focused on consumers," Subramaniam said.

“I think the key differentiation we are hoping to bring is to merge the two worlds in a very symbiotic fashion so things happen a lot faster and lot more efficiently," said Kamath, adding he is bullish on India’s long-term outlook.

“We are not looking for short-term money, nor are we deploying short-term money. This is a broader bet on the India story. The idea is to get into companies early and help them grow over the long term," said Kamath.

GCCF will not just provide money but also mentor and help the companies to grow.

“We’ve been at the precipice of growing consumer brands now for a decade. So the way we intend to build them together across both the Collective flywheel and Gruhas to power their brand building (and) their distribution," Subramaniam added.

“We will be deploying not just capital but we’ll also be deploying a certain degree of operational prowess and influence and credibility to sort of scale this," he said.

“I think brands at this stage of growth require efficient use of marketing dollars and that’s where I think across our current flywheel we’ll be in a position to optimize that."

Gruhas, founded in 2011 by Kamath and Abhijeet Pai (of the Puzzolana Group), has already invested in more than 30 companies across sectors, including prop-tech, ad-tech, consumer space, and health-tech.