Sixth Sense Ventures Plans Fourth Consumer Focused Fund With INR 2,500 Cr Target Corpus

Consumer-focused Sixth Sense Ventures, which counts Bira 91, ProcMart, The Ayurveda Co and Prozo among its portfolio companies, is planning to launch its fourth fund with a target corpus of INR 2,500 Cr.

The Mumbai-based VC firm’s founder Nikhil Vora told Inc42 that the fund, expected to be launched in July, includes a greenshoe option, giving fund the right to increase its corpus further.

He further said that the fund will back consumer-centric startups in the Series A stage, with the average ticket size ranging from INR 40-70 Cr, which can go up to INR 250 Cr.

“While 50% of the funds will be earmarked for Series A funding rounds, the remaining will be invested across the lifecycle of a company, including growth stage and listed companies,” Vora added.

Mint reported the development first.

Founded by former IDFC executive Vora in 2014, Sixth Sense invests in growth- and early-stage consumer companies, with its portfolio comprising The Ayurveda Co. (T.A.C.), GIVA, Smaaash and Freecultr among others. Currently, it has assets under management worth INR 4,500 Cr.

The firm’s third fund SSIO-III, launched in 2021, had a corpus of INR 2,603 Cr. It has deployed 90% of the funds with investments in more than 30 companies, including Bira 91, ProcMart, Altigreen and Prozo among others.

While Sixth Sense’s first fund had a corpus of INR 118 Cr, its second fund had a INR 516 Cr corpus.

The development comes at a time when India is poised to emerge as the world’s third largest consumer market, leapfrogging Germany and Japan, only behind the US and China, as per a report released by investment bank UBS Securities last month.

UBS expects the number of Indians aged 15 and above in the affluent category – those with an annual income of more than $10,000 – to more than double to 88 Mn by 2028 from 40 Mn in 2023.

A surge in consumer spending amid rising disposable income in the country, coupled with the digital economy boom spurred by an increase in internet penetration and digital transactions, presents a lucrative opportunity for consumer-focused funds looking to invest in startups in this space.

So, it’s only fitting that more and more funds are betting on India’s consumer market. Just last month, Sauce VC launched its third fund, eyeing a target corpus of INR 250 Cr, to invest in 15-16 early stage consumer brands.

In 2023, DSG Consumer Partners, raised an undisclosed amount of funding from French cosmetics giant L’Oréal.