RPSG Capital plans to invest RS 500 cr in India-based D2C brands: exits from True Elements with sevenfold return
- ByStartupStory | August 10, 2022
RPSG Capital , an early-stage direct-to-consumer (D2C) brands focused venture capital firm is planning to support Bharat-centric D2C enterprises with a fund worth INR 500 Cr.
Since its beginning in 2018 as a corporate venture arm of RPSG Ventures (formerly known as CESC Ventures), RPSG Capital has been actively seeking limited partners (LPs) and expanding the scope of its operations in the last six years. Although not much has changed from the initial vision, which entails providing finance for digital-first consumer enterprises from pre-series through Series A, the company is looking for limited partners interested in contributing to the growth in the D2C market. Goenka claims that RPSG spotted the potential in 2017, when Flipkart, Nykaa, and other domestic e-commerce platforms were growing, even though the years 2020 and 2021 are anticipated to be the years in which D2C will be the primary focus in India.
“We saw a potential to disrupt at least offline distribution by working with younger enterprises.” the CIO of RPSG Capital stated. “I’m referring to startups’ ability to recruit the proper personnel and resources to establish enormous brands.” Previously, this was not always possible. Furthermore, data relating to e-commerce is readily available across categories. This is assisting companies in making quality judgments while scaling up,” he added.
The D2C expansion in India has been propelled by the entire e-commerce ecosystem — logistics, payments, and customer experience — as well as the maturity with which enterprises are developing online retail brands. This is another reason why investors are discovering more lucrative investment opportunities.
The funding outlook for Indian startups in 2022 is bleak, with the majority of the spikes of 2021 gone. According to data collected until June 25th, the quarterly financing amount for the second quarter of 2022 is $7.3 billion, the lowest amount in the last year. The numbers for July 2022 are far more discouraging. However, some investors are attempting to challenge the trend and find good transactions in this environment, and there is a perception that D2C and retail product companies have mastered the unit economics challenges, whereas consumer tech services such as Zomato and Swiggy continue to struggle with them. RPSG is confident that the expansion of D2C brands will continue.
The activities of RPSG Capital are as autonomous as those of any other VC fund.” There are several synergies between our portfolio and the core business, but they mostly involve the distribution or the expertise of our resources. In terms of operations, though, we are comparable to any other VC firm. With its new fund, RPSG intends to invest in D2C companies that have finally penetrated into the larger Indian market and grown beyond Tier 1 and metro areas. The fund is optimistic about health and wellness and food as issues that may first penetrate this market. This will be the origination of the next growth spurt.
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