Gurugram-based VC Fluid Ventures announced the closure of INR 25 Cr as an investment capital for funding home grown consumer startups. The early-stage micro venture capital fund has a total corpus of INR 80 Cr (including Green Shoe option), slated for investment in direct-to-consumer (D2C) brands in food and beverages, beauty, personal care, lifestyle, and home products.
“Direct to Consumer is the next big wave in India. Right now, there are very few funding options available in the market for this sector. With this corpus from Fluid Ventures, we want to bridge that gap by facilitating investment in D2C brands”, said Amit Singal, general partner, Fluid Ventures.
When the VC was launched in 2019, it had announced plans to work with startups in the B2B and B2C space.
Fluid Ventures is a SEBI registered Alternative Investment Fund Category 1 –VCF. Its first scheme is collaboration with Startup Buddy Services and Agility Ventures. With this fund, they plan to invest in 15-18 emerging brands over the next three years by participating in seed, pre-series A and series A rounds with a cheque size of up to INR 4 Cr and follow-up rounds.
The Covid-19 pandemic, economic slowdown and negative growth has fostered an environment of extreme caution within the Indian investment community. An Inc42 Plus report, titled, Indian Tech Startup Funding Report Q1 2021, shows that D2C and vertical ecommerce startups are fuelling investor confidence in the ecommerce ecosystem.
In the first quarter of 2020, D2C startups raised $22 Mn, which was 5% of the total ecommerce funding that quarter. Next quarter i.e. Q2 2020, funding for D2C startups fell to $10 Mn, but its share of the total ecommerce funding rose to 28%. This was when the effect of the Covid-19 pandemic began to be seen on the funding deals for Indian startups.
In Q3, D2C startups accounted for 17% of the total ecommerce funding; in Q4, 20%; and finally, in the quarter ended March 2021, D2C startups raised $142 Mn, which was 27% of the total funding for ecommerce startups. More importantly, between Q1 2020 and Q1 2021, the funding amount for D2C startups has registered a 93% average quarterly growth. According to an analysis by Inc42 Plus, Indian D2C brands have raised more than $2.04 Bn in funding since 2014.
“Currently, India has one D2C unicorn startup, while there are 20 such startups in the world right now. With this initiative, we hope to open the playing field for more such success stories and encourage large investors to back startups the way they do so in the equity market,” said Dhianu Das, general partner, Fluid Ventures.
The Fluid Ventures fund is guided by an advisory board which includes Manish Aggarwal, cofounder of Startup Buddy, Prashant Narang, cofounder for Agility Ventures, Chittransh Verma, India Partner Arc Group, Rakhee Singal, compliance officer, Startup Buddy and Divij Bajaj, CEO, Power Gummies.
The general partners of the fund have hands-on experience of investing in startups like PeeSafe, Junio, eBikeGo, Chqbook, Neeman Shoes, Akiva Superfoods, Power Gummies, and Vanity Wagon and have successfully exited from BurgerSingh, Carmesi, Infeedo, GoMechanic, ClearDekho to name a few.
Apart from providing financial capital, Fluid Ventures Fund has a robust startup support system within the realms of recruitment, marketing, accounting, taxation, compliance mentoring, CXO coaching, fund mobilisation and legal services.