Fireside Ventures is perhaps one of the few funds in the country that invests in the consumer goods space. It has some of the top family offices such as Premji Invest and the Mariwalas as investors in its new fund. In an interview with BusinessLine , founder and managing director, Kanwaljit Singh shares the venture fund’s journey so far.

While most investors prefer investing in tech start-ups and e-commerce, you are one of the few to focus on the FMCG sector. Is there any particular reason to do so?

Having worked in Unilever for many years before, I always had a passion for this space and then two exciting things happened. One is that I put in some personal money in Paper Boat and, therefore, it gave me early exposure to this space and then while I was with Helion Ventures, we invested in ID Fresh. They have come up with a great story, and if you look at their success, we should have hundreds of them like that as they are self-made and have no legacy at all.

How did Fireside Ventures happen? You have raised about ₹340 crore from marquee investors like Premji Invest, Westbridge and even FMCG companies like Unilever.

Fireside was a learning experience for me. It is an unconventional concept as it is a consumer fund compared to all other platforms and then it is all about early stage, plus it is relatively a small fund. So, I felt I should get it off the ground, and I will probably find more interest and more appreciation among Indian investors. So, I focussed entirely on the Indian investing base. What emerged out of this exercise was that they were three-four different types of investors that were excited about this concept and one of them was the family offices.

Especially, those who have some consumer interest. Premji Invest has a professional family office and has a large business, and they signed on very early and the Mariwala family office of Harsh and Rishab Mariwala. They thoroughly liked the idea of what we were doing. Then we had Westbridge, which was a large private equity fund. Then ITC followed, Emami as well and then Unilever. So, in many ways, it was a validation of what we believed in. We had ₹180 crore initially, and we started investing immediately and then we closed the last fund in February, but by that time we had already made about seven-eight investments.

So, will start-ups in your portfolio play out on the

e-commerce space?

Sure, for us e-commerce is the channel. The more e-commerce develops, the more our brands have access to consumers. We have Amit Agarwal of Amazon as an adviser. He believes that it is like the fuel to power e-commerce. The more brands they get, the more exciting ideas they get and more consumers want to come and see what’s new.

Some of our brands are born on the internet, and then they go into the offline market and some of them like “yoga bar” who sell in both formats. I don’t think there is anything non-tech in today’s world. It’s the lens with which you look at the business. There is an emerging crop of consumers who are looking for exciting consumption ideas in everything they do. It is not only food; it is not just personal products, it is home, it is education, it is healthcare. They are all looking for new ways of doing business, and that’s where our company is trying to get a deal.

In the FMCG space, which are the start-ups you pick up for investing?

Typically, those where 50 per cent of the household budget goes into. So, it could be personal care products, or even those which are outside these categories. We have invested in start-ups which are into children activities. In some sense, it has been an interesting discovery for us as the market for consumer brands or the opportunity for investing is wide. Some themes are becoming interesting. For example, we are seeing a lot of excitement around the theme of investing in products for children. There is a logical explanation for it. We are dealing with nuclear families which have high disposable incomes. Very often, the husband and wife both work. So, there is a little bit of guilt feeling for providing for a child and of course they can afford it.

What is the initial investment in these start-ups? How much equity do you take in them?

We start off with as low as ₹1 crore and if the company starts doing well, we put another ₹4 crore and then may be ₹10 crore more. We can actually see that companies are growing much faster than what we originally thought because the market momentum is exciting as people are now open to trying out new products.

We are even writing bigger cheques because we are excited about the business and we can even go up to ₹15 crore. That’s why we are bringing in more investors. As far as equity is concerned, we look for 15-20 per cent and end up with about 25 per cent of final ownership. Real hard work is in the initial days and obviously we want to have meaningful ownership in the companies to be able to justify the kind of effort we are putting in.

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