The VC fund said that its second fund was oversubscribed 1.5X. It had to exercise the green shoe option to accommodate high investor interest
It claims to have already invested in four D2C startups such as Supertails, Perfora, Rabitat and Headway via the fund
RPSG Capital invests in the range of INR 10-40 Cr in early stage rounds in the D2C space
Early stage consumer VC fund RPSG Capital Ventures has marked the final close of its latest Fund II at INR 550 Cr.
This is 1.5X the target size envisaged for the fund. The VC said it had to exercise the green shoe option to accommodate high investor interest.
The investor base for the fund includes family offices, high net worth individuals (HNIs) and industry veterans from the consumer sector.
Through this fund, the firm claims to have already invested in four direct-to-consumer (D2C) startups such as Supertails, Perfora, Rabitat and Headway.
The fund invests in Series A rounds with first cheques of INR 10-40 Cr in the digitally native consumer ecosystem across F&B (food and beverages), beauty, health and wellness, entertainment, lifestyle goods and consumer enabler categories.
It is pertinent to note that RPSG Capital typically acquires 10-20% stake in the companies it invests in. The fund says that it refrains from tendering big cheques to early stage startups and prefers to retain a significant portion of its corpus for successive investments as the brands scale.
“We’ve built a team that has a deep understanding of the Indian consumer ecosystem, with strength in business build up, GTM, and brand building. With this new Fund, we’ll continue to invest into new age consumer businesses that have solid unit economics, differentiated positioning, and strong teams,” RPSG Capital’s managing partner Abhishek Goenka said.
This comes about two years after Goenka said that the fund was targeting to raise INR 500 Cr for its second fund. At that time, the VC claimed that more than half of the capital for the second fund would be raised from external LPs.
Founded in 2018, the RPSG Capital Ventures invests in digital-first consumer brands in the pre-series to Series A stages. Including the aforementioned four investments, it has made a total of 16 investments till date, backing the likes of ayurvedic beauty brand Vedix, personal care brand mCaffeine, and plant-based nutraceutical brand Plix, fashion brand The Souled Store among others via its inaugural INR 100 Cr fund.
Besides, the VC was also an early backer of healthy snacks brand True Elements, investing in the startup back in 2018. It claims to have made a 7X return from the investment when it sold its stake to FMCG Marico back in May 2022.
With the launch of the fund, the VC will be looking to ramp up its investments in the growing D2C startup ecosystem in the country. The ecosystem sees more than 800 startups catering to over 190 Mn digital shoppers. The market, which saw an initial growth spurt during the pandemic, has been on an exponential growth streak over the past years and is poised to reach a size of $100 Bn by next year.
However, funding trends for startups in the D2C space haven’t been that riveting over the past fiscal year. D2C brands managed to bag $1.4 Bn across 135 deals in 2023, around 14% of the over $10 Bn funding netted by Indian startups in 2023.
