SUMMARY
Singh said that it is essential for founders to understand whether the acquisition will genuinely benefit the company or if it's merely a perceived benefit
One must also assess whether the other party recognises the valuable skills that the brand brings to the table, the CEO said
Singh shared his insights during a panel discussion titled "The BIG Exit – How D2C Brands Can Develop an Exit Strategy" at the fourth edition of Inc42's D2C Summit 2023
When it comes to exiting a startup, each founder finds themselves in a unique position. However, Prabhkiran Singh, the CEO & cofounder of D2C brand bewakoof
, firmly believe that founders should possess a clear understanding of their priorities when it comes to their startup and whether they align with the company’s board.
“You, as a founder, should have clarity on what you are optimising for to decide on the key value additions you seek in a future deal. It could be financial gain or the commitment to continue building, which would require patient capital,” Singh said.
Singh shared these insights during a panel discussion titled “The BIG Exit – How D2C Brands Can Develop an Exit Strategy” at the fourth edition of Inc42’s D2C Summit 2023. The session was moderated by Angshuman Bhattacharya, National Leader of the Consumer Products & Retail Sector at EY India. Joining Singh on the panel were Pranav Malhotra, the founder of Trunativ; Rishubh Satiya, the CEO & cofounder of Plix; and Mohit Sadaani of The Moms Co.
Incorporated in 2012 by Prabhkiran Singh and Siddharth Munot, the Mumbai-based D2C brand Bewakoof specialises in selling casual wear and accessories, including theme-based clothing, notebooks, and backpacks, through its website.
In December 2022, Aditya Birla Group’s house of brands business, TMRW, invested INR 200 Cr in Bewakoof.
Deliberating upon another aspect of the exit strategy, Singh said that founders must gauge the strategic value of the deal. He added that it is essential to understand whether the acquisition will genuinely benefit the company or if it’s merely a perceived benefit.
Additionally, one must consider the perspective of the D2C platform, assessing whether the other party recognises the valuable skills that the brand brings to the table.
“There must be a willingness to make the acquired entity a corporate brand custodian and delegate authority in key areas or to the founders, as the brand requires independence to thrive,” he added.
During the discussion, Singh emphasised that no founder starts a startup with a pessimistic view of getting acquired. He cited several past partnerships where acquisitions proved highly beneficial to the success of companies such as Flipkart and PhonePe, CaratLane and Tanishq, MakeMyTrip and ibibo, Disney and Pixar, and Facebook and WhatsApp, among others.
He also stressed that some truly transformative and substantial ideas require significant capital. Therefore, a startup must decide whether to pursue this path independently or collaborate with a like-minded company where both parties are mature and can create something meaningful for consumers.
The D2C Summit 2023 is presented by Google Cloud, co-presented by Simpl, and powered by Emiza and Salesforce.
