Founded by Kanwaljit Singh, Fireside Ventures has backed startups including boAt, Mamaearth, Vahdam Teas, Yoga Bar, Bombay Shaving Company, Pipa Bella, Kapiva Ayurveda, and more.
Early-stage venture capital firm Fireside Ventures has closed their second fund — Fireside Fund II at Rs 863 crores (around $118 million) with backing from marquee investors including SIDBI’s Rs 10,000 crore Fund of Funds for Startups, Investment Corporation of Dubai, Nippon India Digital Innovation AIF, Bajaj Holdings and Investment, ITC, L’Oréal, Pidilite group, Premji Invest, and a US university endowment. The fund will invest in 15-20 consumer startups while focusing on digital-first brands. “We have a commitment of Rs 863 crore while we started with a target of Rs 750 crore and saw strong interest from different investors and now have formally closed the fund. We have over 100 investors in the fund and had announced the first close (of the second fund) around a year-and-a-half back and have invested in four companies. We are seeing over 100 investment opportunities every month,” Kanwaljit Singh, Founder & Managing Partner Fireside Ventures told reporters on Wednesday in a virtual meet.
The first close of around Rs 440 crore ($60 million) of the second fund was announced in November 2019. Fable Street, SARVA Yoga, Gynoveda, and Slurrp Farm were the four startups backed from the first close. The VC firm had closed its first fund in February 2018 with a corpus of Rs 340 crores from which it made 18 investments. The market opportunity to back digital-first consumer brands, according to Fireside, involves over 110 million online shoppers that are likely to triple by 2025 even as internet penetration in rural India is expected to grow to 45 per cent by this year. The fund backs such digital-first consumer brands across food and beverages, beauty & personal care, lifestyle, and home products segments. So far, Fireside has invested in 22 startups including boat, Mamaearth, Vahdam Teas, Yoga Bar, Bombay Shaving Company, Pipa Bella, Kapiva Ayurveda, and more.
The growth comes on the back of increased e-commerce market penetration that is set to be worth $100-120 billion in gross merchandise value by 2025 while e-commerce shoppers are expected to be around 300-350, according to a Bain and Co. report last year. Indian e-commerce, till 2020, was 3.4 per cent of the retail sector with around 100 million users and around $30 billion in GMV. Importantly, startup funding in 2020 had declined 21.3 per from 2019 amid Covid impact as investors put $11.4 billion in the pandemic year, down from $14.5 billion in 2019, according to the data shared by Tracxn. The fall in the number of deals was less severe as startups saw 1,152 funding rounds in 2020 vis-à-vis 1,185 in 2019.