Bengaluru-headquartered early-stage venture capital firm Fireside Ventures, an active backer of consumer brands, has closed its second fund at USD 118 million, more than double the size of its first fund. It plans to invest in 15-20 startups from this fund and has already made four bets as of now.
The second fund called Fireside Fund II is backed by investors such as Fund of Funds for Startups operated by Indian government-owned Small industrial Development Bank of India (SIDBI), Investment Corporation of Dubai, Nippon India Digital Innovation AIF, Bajaj Holdings and Investment Limited, ITC Limited, L’OREAL, Pidilite group, Premji Invest, and a large US university endowment.
Launched in 2017, Fireside Ventures typically invests in consumer brands across sectors such as food and beverages, beauty, personal care, lifestyle, and home products.
To date, Fireside has invested in 22 brands including Slurrp Farm, FableStreet, boAt, Mamaearth, Vahdam Teas, Yoga Bar, Samosa Singh, and Tasty Tales. Apart from these, it has also made a couple of exits. Its typical check size is about USD 1-2 million.
Read this: India’s high-income households fuel new, unique brands: Q&A with Fireside Ventures
The company did the final closing of its first fund in February 2018 with a corpus of about USD 50 million. It received investment interest from over 2,000 companies and evaluated over 400 of them before making 18 investments. Currently, about 95% of the investible corpus of its first fund has been deployed and the remaining 5% is reserved for follow-up rounds.
“Our core focus is on investing in brands that solve issues for the top tier consumers, and we expect that segment to have about 30 million high-income households (with an income of USD 40,000 plus) in the next decade or so from the current USD nine million,” VS Kannan Sitaram, venture partner at Fireside Ventures, told KrASIA in a recent interview. “These households will have a higher propensity for consumption than other segments and with issues that are not being met by the existing mass-market brands.”
“We appreciate that there are many consumers in the next 100 million internet users, who are very comfortable with digital media and e-commerce and are tech-savvy. We will evaluate investments in brands that target such consumers too.”
As digital-first consumer brands become mainstream on the back of the rapidly increasing digital adoption in India owing to the pandemic, the VC said it has been seeing more interest from its LPs and the larger investor community.
“A large number of our portfolio companies saw positive tailwinds during and post the pandemic,” said Kanwaljit Singh, founder and managing partner, Fireside Ventures. “We are now eager to go all out and partner with young Indian entrepreneurs who are creating exciting new digital-first brands across the consumption spectrum and are consciously building brands that focus on good for consumers and good for the world.”
The company believes that the over-arching trends and shifts seen in consumer demand for an extra dose of “wellness and goodness in the products and services they consume, are here to stay,” the company said in a statement.