SUMMARY
The Series A round includes a mix of both equity and debt financing
Mensa Brands’ business model involves investing working capital and picking up equity in other D2C startups and scaling their brands' presence online
Mensa will acquire majority stakes of around 60-65% in other D2C brands that generate a turnover of at least INR 10-70 crore and are profitable.
Direct to consumer (D2C) startup Mensa Brands founded by ex-Myntra and Medlife co-founder Ananth Narayanan, has raised $50Mn in a mix of equity and debt in its Series A Funding round from Accel Partners, Falcon Edge Capital, Norwest Venture Partners as well as prominent angel investors such as Kunal Shah, Mukesh Bansal, Rahul Mehta of DST Global and Scott Shleifer of Tiger Global.
Venture debt firms including Alteria Capital and InnoVen Capital also participated in the current round, the startup said in a statement on Monday (31st May).
The D2C startup aims to invest in other new-age consumer brands under its ‘House of Brands’ initiative and help them thrust into the ecommerce segment. Under the initiative, Mensa aims to partner and invest in digital-first brands and scale them exponentially.
Mensa will also provide growth marketing, operational improvement and working capital to the brands it works with. According to an Economic Times report, Mensa will acquire majority stakes of around 60-65% in other D2C brands that generate a turnover of at least INR 10-70 crore and are profitable.
Over the next 3 years, Mensa plans to acquire more than 50 brands across categories including home, garden, apparel, personal care and beauty. Mensa will also help brands scale their presence across different marketplaces using a data-led approach, a better balance sheet and a focus on consumer experience that will help increase overall Net Promoter Scores (NPS).
“Scaling digital brands from India is a large opportunity. Incredibly excited and passionate about partnering with terrific founders and helping scale their brands globally. Having seen this first hand at Myntra and Medlife we know the effort it takes to scale a brand digitally – we will be a true trustee of your brand,” Ananth Narayanan, founder and CEO of Mensa Brands said in a statement.
Ananth and his team bring in-house domain expertise in marketplace-native technology, data mining and digital marketing, category management and operations, brand building and global expansion.
“We’re excited to partner with Ananth and the team at Mensa. Not only are they truly strategic and high caliber, but also have chosen a problem of brand aggregation that we believe has the right tailwinds. With digital acceleration of commerce globally, this model would be additive to the brand owners, the platforms and the consumers and should thus scale rapidly,” Subrata Mitra, Partner at Accel Partners added.
Mensa Brands follow a business model similar to US-based Thrasio which acquires independent D2C brands on Amazon and converts those into white-label brands owned under the Thrasio branding. However, Mensa Brands isn’t the first such adoptor of Thrasio model in India. Startups such as Powerhouse 91 funded by Titan Capital, and Softbank-backed Firstcry also have made strides in this segment in India.
Pune-based baby products marketplace Firstcry is currently one of the largest valued startups in the whitelabel D2C segment which is currently valued at over $2Bn. Firstcry had entered the unicorn club last year, after raising $296 Mn (INR 2,120 Cr) in a Series E round from Japan-based Softbank’s Vision Fund in February 2020.
India is currently seeing an uptick of smaller brands, with around 850K vendors selling on Amazon India. Of these, around 4,152 crossed INR 1 Cr in sales in 2020, according to Amazon. There are around 350K such sellers on Flipkart, of which 70 crossed INR 1 Cr in sales.
