An early-stage venture capital firm with a sharp leaning towards consumer brands, Fireside Ventures aims to build multimillion-dollar brands of the likes of Unilever, Dabur and Wipro.
With three funds totalling ₹3,000 crore, it has deployed ₹1,500–1,700 crore, targeting full deployment within 2–3 years, Dipanjan Basu, co-founder and partner, told BusinessLine. Edited excerpts from an interview:
Where does Fireside Ventures invest, and what is the evaluation criteria?
Given the size and the opportunity in India, we think that multi-million-dollar brands or companies can be built without burning capital. Moreover, we believe in creating long-term assets and institutions. We started with the idea that we could make another Unilever, Dabur, or Wipro — and we are in the right direction with companies such as Mamaearth and Boat. As investors, we don’t focus on high growth, despite burning money. Therefore, all companies have ended up raising less capital, indicating 4x capital efficiency, which means that to build ₹100-crore companies, they are not consuming more than Rs ₹25-35 crore of cash.
Can you share an overview of your current portfolio and the performance of the companies?
Across three funds, we have invested in 40-plus companies in the consumer space. We have two measures of profitability: unit economics (CM2) and EBITDA. Today, almost all companies are CM2 profitable, which means no company is burning money by selling more. So, of the 28 companies, almost one-third are EBITDA-level profitable, and maybe eight to 10 will be almost EBITDA-level profitable. In addition, seven to eight are newly onboarded start-ups.
What is the typical exit strategy?
To date, we have exited from 12 start-ups, and operate through a three-pronged exit strategy. The first is via the IPO stage; the second is focused on strategic exits — for instance, we recently announced the deal with YogaBar and ITC; and the third strategy involves an exit for large late-stage investors.
How much has the firm invested since inception?
We have raised over ₹3,000 crore across three funds. Of this, excluding 5–10 per cent of the first two funds, we have deployed ₹1,500–1,700 crore. Currently, we have deployed about 25 per cent of our third fund, which we raised in 2022, across 12–13 deals. We expect to complete the deployment in the next 2–3 years before raising fresh funds.