Fireside Ventures, an early-stage venture capital (VC) firm, on Wednesday said it has raised $225 million at the close of its third fund, double the size of its previous fund and its largest ever.
The company plans to make a total of 25-30 investments from the new fund, averaging about 7-8 investments in a year in the health and wellness, edutainment, lifestyle, and fast-moving consumer companies (FMCG) space.
“While we will broadly maintain the investment thesis that we followed in the past, we’ll focus on companies for the millennial women, kids, healthcare at home and conscious consumption,” the company said.
The VC firm has already made five partial exits and as many full exits from its previous funds and generated a return of about 75% from those exits. It has fully sold off its stake in Pipa Bella to Nykaa, some in Bombay Shaving Company to Reckitt Benckiser, its holding in Azani, a sports nutrition company, to CureFit, and also offloaded its stake in Kwik24 to BigBasket. Fireside has also sold some stake in Mamaearth and boAt, both IPO-hopeful companies.
“Less than 20% of our holdings in companies we have sold and continue to hold the rest for value creation,” Vinay Singh, partner at Fireside Ventures, told FE.
Further, from the third fund, Fireside Ventures will make only new investments. The VC firm will continue to back existing portfolio companies from 65% of the capital reserved in the fund II. It largely backs direct-to-consumer (D2C) – expected to be a $100-billion opportunity by 2025 — focused companies.
Kannan Sitaram, venture partner, Fireside Ventures, said the government’s open network for digital commerce (ONDC) was a promising avenue and will encourage its brands to leverage the network. “Mamaearth, our portfolio company, is already on the ONDC and other companies are observing the incremental value. It is still very formative days, there are still teething issues but we’ll observe over the next one year to encourage other companies to go live on the ONDC,” Sitaram said.
“We believe the next 150-200 million shoppers will come from there as consumers continue to experiment and feeling inhibited to shop on the current e-commerce platforms,” Singh added.
The third fund is anchored by new and existing Indian and global investors which include, Self-Reliant India Fund, Investment Corporation of Dubai, SBI, Premji Invest, Waterfield – Fund of Funds, ITC Limited, Emami Limited, Sharrp Ventures and several startup founders.
The company said its average investment size will remain around $1 million-$2 million for Series A and pre-Series A companies, the funding slowdown notwithstanding, while expressing the possibility that an investment, in a single startup, can also go upwards of $10 million.
Launched in 2017, Fireside Ventures said it currently manages Rs 3,000 crore ($395 million) of assets under management (AUM) and has invested in 31 brands. Its portfolio companies include: The Baker’s Dozen, NatHabit, Smytten, Traya, The Sleep Company, 10Club, among others.