As the funnel of good-quality early-stage companies are built, mid-stage and growth capital always follows, says Fireside Ventures founder Kanwaljit Singh.
Kanwaljit Singh, founder and managing partner, Fireside Ventures, announced the first close of his maiden fund at Rs 180 crores.
In an interview with Ranju Sarkar he tells why it is a great time to build new consumer brands in India.
What’s the investment thesis for your fund?
We believe there is a strong emerging opportunity for building consumer brands in India.
Growth of channels like modern trade and online players; increasing consumer aspirations for new products, brands and quality of the first-time entrepreneurs starting consumer businesses, all contribute to this inflection point.
Brands such as Paper Boat, Fogg, iD Fresh, among others, have already built interesting businesses in the past 5 years. Fireside aims to participate in this opportunity as an early-stage investor and provide strategic support to the companies through a network of mentors and partners.
Why are you bullish on the consumer space? Have investors made money in this space?
As mentioned above, several macro trends are converging to make this an exciting time for building new consumer brands. Another exciting trend is interest among strategic and larger private equity players to invest /acquire exciting brands.
We have seen a growing acquisition interest from strategic partners (Indulekha Hair Oil by Hindustan Unilever, Himalaya Water by Tata, Kesh King by Emami, B Natural by ITC, etc). Partners like Avendus are also helping build this ecosystem.
What’s been your track record in terms of exits and returns at Helion and otherwise?
I have been involved in several marquee businesses from inception. Apart from investments in brands such as Paper Boat, Epigamia, Licious in my personal capacity, I have also invested in iD Fresh, Yepme, LifeCell from the Helion portfolio.
Why have family offices taken to VCs like bees? What kind of returns do they expect?
We found strong interest from family offices who have in-depth knowledge of consumer space and believe in this opportunity. Apart from seeing this as a strong investment thesis, several of our investors are keen to participate in future rounds of investing in these companies and also believe Fireside will become a source of new developments and innovation in this space.
How is the fundraising environment given a lot of money for India was raised last year?
Since Fireside is an exclusive consumers’ brand-focused fund, we saw strong interest from family offices and investment groups such as Westbridge Capital.
Why a few are targeting mid-stage?
I believe investing is a virtuous cycle. As the funnel of good-quality early-stage companies are built, mid-stage and growth capital always follows.
We have seen this trend in several of our portfolio companies -- Hector Beverages (Paper Boat), Drums Foods (Epigamia), Licious, iD Fresh, etc.
Do you see fundraising easing for start-ups? What’s the evidence?
As I said earlier, consumer brands are an emerging space and there is lot of interest to invest from high networth individuals and family offices.
The traditional tech VCs are still not looking at this space actively, but specialist funds such as Fireside aim to fill that gap for early stage institutional funding.
How venture capitals have done in India for LPs from an exit perspective?
Exits till date have been relatively a few and many companies are still in build out mode.
Since a lot of early-stage investors are in the end of life stage for their funds, we should see a lot more exits in the next two to three years.