(Image credits: X @firesideventure)
BENGALURU: Consumer focused venture capital firm Fireside Ventures has closed its fourth fund with commitments of Rs 2,265 crore (about $253 million), doubling down on early stage consumer brands as it chases the next wave of health, wellness and lifestyle companies in India. The new vehicle takes the firm’s total assets under management to about Rs 5,300 crore ($650 million) across four funds.“The check size and the strategy does not change. In fact it is absolutely the same,” Kanwaljit Singh, founder and managing partner at Fireside Ventures, told TOI. He said the sweet spot for Fund IV will remain between seed and Series A. “We are doing deals which could be just pre-launch and therefore still not in the market. Obviously the bulk of our investing is when a company is already launched and there are some early proof points… but very much early stage venture funds focused on consumer brands.”Singh said Fireside is now building a deeper thesis across consumer cohorts, geographies and sectors compared with its first funds, which were largely centred on urban millennials. “We are seeing a lot of very interesting consumer cohorts starting to emerge… massive opportunities emerging in the Gen Z space. Even Gen Alpha is starting to show up. Even the seniors, we are seeing some pretty interesting opportunities, especially in the area of slightly older women, health, menopause, reproductive health,” he said.On the geographic side, Fireside is pushing beyond metros into what it calls India 1, 2 and 3. “We have started looking at deeper markets in small town tier 2, tier 3 India, all the way up to rural India,” Singh said, adding that channels such as quick commerce have made these markets more accessible and aspirational.Sectorally, the firm expects health and wellness to throw up some of its next large winners. “If I have to pick one single thesis, I would bet on the health and wellness space because that is an under penetrated space and we do believe some large businesses can be built there,” Singh said. He added that Fireside is already seeing new models emerge in nutraceuticals, supplements, medical devices and mental health, and pointed to growing interest in products such as daily supplements among younger consumers.Fund IV has raised capital from a mix of global and domestic limited partners, including sovereign wealth funds such as Abu Dhabi Investment Authority and Investment Corporation of Dubai, US university endowments, financial institutions like HarbourVest, Waterfield and Fidelity International, as well as consumer focused Indian business families and founders.“This is by design. We wanted to have a good mix of global and Indian institutions and of course a lot of family offices who have supported us from the beginning,” Singh said. Consumer brands are still a relatively new venture thesis for many global LPs, he added. “It takes a little bit of effort to educate the global investors about the opportunity and why it is valuable and why India is such an exciting market for something like this,” he said, noting that Fireside chose not to raise more than it could deploy effectively.Fund III is now fully constructed and will only support existing portfolio companies, with about 20 to 25% of that capital reserved for follow-on rounds, Singh said. All new deals will be written out of Fund IV. Across its platform, Fireside’s portfolio companies together contribute over 1.6 billion dollars in revenue and more than 7 billion dollars in market value, with several brands now operating at over Rs 500 crore in annual sales, according to the firm. Notable investments include Honasa Consumer, boAt, The Sleep Company, Slurrp Farm, Sweet Karam Coffee, Inito, Pilgrim, NewMe and Traya.Since its launch in 2017, Fireside has been the first institutional investor in more than 74% of the 60 plus consumer brands it has backed. Its first fund is ranked first in its 2018 vintage peer set on IRR and DPI in rupee terms in the CRISIL AIF Benchmarks as of September 30, 2024, according to the company.
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