Fireside raises $253 mn in a sign global appetite for Indian brands is rising

Dipanjan Basu, co-founder and partner at Fireside Ventures, said, “In this fund, we have a 50-50 split between domestic and global investors. A healthy mix of different types of investors, including funds of funds, financial services, banks, life insurance companies, etc.” he said.

“Our funds in the past were more domestically focused, with almost 80-90% coming from Indian LPs. This fund has seen more of an evolution as LPs have seen a well-designed early-stage strategy materialise, coming in early, putting in a small cheque, taking around 20% ownership and doubling the winner,” he said, adding that a major chunk of the firm’s capital (about 65%) has been earmarked for follow-ons.

The capital was raised through the Gift City feeder fund and the India master fund. The fund saw a mix of Indian and global backers, along with various early and subsequent investors. The company will make approximately 35-36 investments through the fund and will begin distribution this month. Feeder fund is an investment vehicle based in the Gift City of Ahmedabad and is mostly used by foreign investors to invest in Indian startups. Indian master fund is the main fund vehicle generally used by domestic investors.

Investors of the new fund include Sharp Ventures, Mirabilis and Emami Ltd. In addition to consumer companies and family offices such as US University Endowments, Abu Dhabi Investment Authority, Investment Corporation of Dubai (ICD) and leading financial institutions such as HarbourVest, Waterfield, Fidelity International.

Basu said Fireside Ventures’ early-stage venture mindset, combined with its private equity-style follow-on strategy, has attracted interest from global LPs and helped boost the returns of its previous funds.

Basu said, “Our first fund has a net distributed of 3.5 times paid-in capital (DPI) and internal rate of return (IRR) is over 40%. Our other funds are also following the same lines. Our second fund has already started partial exits from companies like Pilgrim and The Sleep Company.”

The investment firm used a variety of exit options, including secondary sales, mergers and acquisitions, and initial public offerings (IPOs), further increasing liquidity and DPI. Other past exits include Mamaearth (via IPO), Design Cafe (merged with HomeLane) and Yoga Bar (acquired by ITC).

DPI is an important metric in private equity or venture capital firms and measures how much cash a fund returns to investors as a proportion of the capital they contribute.

Fireside’s portfolio companies currently generate over $1.6 billion in annual revenue and together have a market capitalization of over $7 billion; many are already operating. ₹500 crore plus scale.

Based on IRR and DPI in rupee terms, Fireside Fund I was ranked No. 1 out of 11 funds among 2018 vintage Category 1 funds under CRISIL AIF Benchmarks as on September 30, 2024.

Founded in 2017, Fireside has been the first corporate backer of over 74% of its portfolio companies and owns over 60 consumer brands. Honasa Consumer has supported companies such as boAt, The Sleep Company, Frubon, The Good Bug, Slurrp Farm, Sweet Karam Coffee, Pilgrim, Moxie, New Me and Traya.

Fireside’s total assets under management (AUM) with latest funding ₹5,300 crore or about $650 million. The sizes of past funds raised in 2017, 2019 and 2022 were $50 million, $118 million and $225 million, respectively. Key sectors it supports include health and wellness, food and beverage, beauty and personal care, lifestyle, home products and fashion.

“Health and wellness is becoming a huge category for us. We also started our journey early in investing in GenZ and Gen Alpha as themes. We see beauty, personal care, fashion and food being disrupted. There are also newer areas like travel and sports, and we are also looking at AI-related games that can disrupt these categories,” Basu said. he said. Nowadays, companies see a faster growth rate and increase their annual revenues. ₹100 crores, ₹200 crore and above ₹500 crore in a shorter period of time.