Bengaluru-based Fireside Ventures, an early-stage venture investment fund focused on consumer brands, is in the process of raising a $100-million second fund, said two people aware of the development, requesting anonymity.
The corpus of the second fund will be more than double that of the first fund, said the people.
The VC firm’s first fund had a corpus of ₹340 crore (approximately $48 million) and was backed by FMCG brands such as Unilever Ventures, Emami Ltd and ITC Ltd.
Premji Invest, Westbridge Capital, Mariwala Family Office, Sanjiv Goenka Family Office, and Sunil Munjal’s Hero Enterprise Investment Office had also invested in the fund. Led by consumer industry veteran Kanwaljit Singh, besides Vinay Singh and V.S. Kannan Sitaram, Fireside Ventures was founded in 2017. It has invested across segments such as personal care, processed foods, lifestyle and home products. Its portfolio include the likes of Yoga Bar, Samosa Singh, Bombay Shaving Co., Mama Earth and Vahdam Teas.
“It is well-positioned to announce the first close in a month’s time," said a Bengaluru-based investment banker, who is one of the people cited above. After the first close, an investment fund starts committing and deploying capital.
An email sent to Kanwaljit Singh, managing partner, Fireside Ventures, on Thursday did not elicit any response.
Earlier this year, the VC firm had said that it intends to create as many as 20-25 iconic consumer brands, with revenue of as much as ₹1,000 crore per portfolio firm, over 10-15 years. To be sure, the fund’s focus has been on backing founders who are creating brands catering to the emerging millennial consumers.
At the back of this investment thesis is the country’s consumption market. India is expected to see a fourfold jump in consumer spend by 2030, according to a World Economic Forum and Bain & Co. report released earlier this year. Consumer spend is expected to surge from $1.5 trillion to $6 trillion. Also, the country will be a young consumer economy with 77% millennials and Gen Z.
“Fireside Ventures is a vertical specific venture fund and has an advantage as no one else has with such a strong sector focus on consumer brands. There are good opportunities to invest in this space," said Anil Joshi, managing partner, Unicorn India Ventures, a venture capital firm.
Joshi said consumer brands, such as Manpasand Beverages Ltd, which offers mango drink MangoSip; Cremica, a maker of cookies and other baked products; and potato chips maker Balaji Wafers, have been successful in creating a base of loyal customers for decades now.
“India has a large consumption story and, with the right product and price mix, there is a potential to become a success story. Interesting product offerings like Timla Foods (which makes flavoured pop-corn under its brand name PopiCorn) and MilkMantra (which offers natural milk products to urban consumers) have shown there are large opportunities to scale," said Joshi.
Joshi added that individual brands can scale fast provided they are funded right and for a longer period. “Their success can attract a lot of competition. Also, once proved as a model, the brand will need more funds to achieve a larger scale. With better logistics now, India offers opportunity to look beyond local boundaries."
“Exit is not a problem for investors. There are strategic buyouts, and IPO opportunities," Joshi said.