SUMMARY
RPSG Capital Ventures focuses on metrics such as net promoter score (NPS), user cohorts, retention, lifetime value (LTV), among others, for investing in D2C brands: Goenka
Speaking at Inc42’s ‘The D2C Summit 3.0’, Goenka said he finds relevance in understanding the customers’ love towards the brands, irrespective of the stage they are in
Goenka was speaking at a session named ‘Riding The D2C Boom: Coping With The Ever-Evolving Funding Landscape’
Metrics to value startups keep changing with time, and the same for D2C brands are evolving, reiterated Abhishek Goenka, head and CIO at RPSG Capital Ventures, during Inc42’s ‘The D2C Summit 3.0’.
Goenka said that when it comes to investing in the D2C brands today, his firm focuses on the metrics such as net promoter score (NPS), user cohorts, retention, lifetime value (LTV), among others.
While at least 70% of the discussions revolve around unit economics or the scope of a business turning profitable, Goenka finds more relevance in understanding the customers’ love towards the brands, irrespective of the stage they are in.
It is really important if the founders with limited resources can focus only on a certain section of the target group in a certain market and product category, and still be able to show proof of concept or an early product-market fit, he said.
Goenka was speaking at a session named ‘Riding The D2C Boom: Coping With The Ever-Evolving Funding Landscape’, which also saw participation of Prasun Agarwal, partner at A91 Partners; Sanil Sachar, founding partner of Huddle; Kannan Sitaram, partner at Fireside Ventures; with Shiprocket’s Vishesh Khurana moderating the session.
Speaking about investing in pre-revenue ventures, Huddle’s Sachar noted that everyone is bound to fail, pivot, and branch out new things, but being able to react to it with shared learning is important.
“So, we love pre-revenue ventures, and that goes for any sector,” he added.
The investors of popular D2C brands such as Mamaearth, Sugar Cosmetics, PaperBoat, Bold Care, mCaffeine, among others, also spoke about the funding winter and the way D2C brands can survive it, the importance of omnichannel presence, the role of logistics enablers in the D2C ecosystem during an economic downturn, among other issues.
As per Inc42’s analysis, the current challenges for the D2C brands in India include competition from legacy players and marketplaces, difficulty in managing logistics, low customer retention and loyalty, and high customer acquisition cost.
Despite the obstacles, D2C business is evolving rapidly in the country, with 346 funded brands present today.
While India’s ecommerce market is set to surpass $400 Bn mark By 2030, growing at a compound annual growth rate (CAGR) of 19% in the 2022-2030 period, the Indian D2C brands’ total addressable market opportunity is expected to cross $302 Bn mark by the same year, as per the report.
