Aniket Pujari“In this fund, we have a 50-50 split between domestic and global investors. It’s a healthy mix of different types of investors including fund of funds, financial services, banks, life insurance companies, etc.,” said Dipanjan Basu, co-founder and partner at Fireside Ventures.
“Our past funds were more domestic-driven with nearly 80-90% coming from Indian LPs. This fund has seen more of an evolution as LPs are seeing a well-devised early-stage strategy play out where we come in early, put a small cheque, take about 20% ownership and double down on the winner,” he said, adding that a large portion (about 65%) of the firm’s capital is reserved for follow-ons.
The capital was raised through its Gift City feeder fund and India master fund. The fund has seen a mix of several first-time and follow-on investors with a diverse mix of Indian and global backers. The company will make about 35-36 investments through the fund, and will start deploying this month. The feeder fund is an investment vehicle based in Ahmedabad’s Gift City that is used mostly by foreign investors to invest in Indian startups. The India master fund is the main fund vehicle used typically by domestic investors.
The new fund’s investors include US University Endowments, global sovereign funds like Abu Dhabi Investment Authority, Investment Corporation of Dubai (ICD), and prominent financial institutions like HarbourVest, Waterfield, Fidelity International, besides consumer corporations and family offices like Sharp Ventures, Mirabilis, and Emami Ltd.
Basu said that Fireside Ventures’ early-stage risk mindset combined with a private-equity-style follow-on strategy appeals to global LPs, and has helped lift returns across its earlier funds.
“Our first fund has a 3.5x net distributed to paid-in capital (DPI), and has an internal rate of return (IRR) of over 40%. Our other funds are also tracking on the same line. The second fund has already begun making part-exits in companies such as Pilgrim and The Sleep Company,” Basu said.
The investment firm has exercised several exit options, including secondary sales, M&As, and initial public offerings (IPOs), which has further boosted liquidity and DPI. Other past exits include Mamaearth (via IPO), Design Cafe (merged with HomeLane), and Yoga Bar (acquired by ITC).
DPI is a key metric in private equity or venture capital firms, and measures how much cash a fund has returned to investors as a proportion of the capital they contributed.
Fireside’s portfolio companies now generate over $1.6 billion in annual revenue and together command more than $7 billion in market value, with many of them already operating at ₹500 crore-plus scale.
Based on IRR and DPI in rupee terms, Fireside Fund I was ranked 1st among 11 funds in the 2018 vintage Category 1 funds under the CRISIL AIF Benchmarks as of 30 September 2024.
Founded in 2017, Fireside has been the first institutional backer in over 74% of its portfolio companies and has over 60 consumer brands. It has backed companies including Honasa Consumer, boAt, The Sleep Company, Frubon, The Good Bug, Slurrp Farm, Sweet Karam Coffee, Pilgrim, Moxie, New Me and Traya among others.
With the latest fund, Fireside’s total assets under management (AUM) stand at ₹5,300 crore or about $650 million. Its past funds raised in 2017, 2019 and 2022 were $50 million, $118 million and $225 million, respectively, in sizes. The key sectors that it has backed include health & wellness, food and beverages, beauty and personal care, lifestyle, home products & fashion.
“Health and wellness is growing to be a very big category for us. We have also been early in our journey to invest in GenZ and Gen Alpha as a theme. We are seeing beauty, personal care, fashion and food getting disrupted. Other newer areas include travel and sports and we are also looking at AI-related plays that can disrupt these categories,” Basu said. He added that companies today are seeing a faster pace of growth, scaling their yearly revenues to ₹100 crore, ₹200 crore and beyond ₹500 crore in a shorter time frame.
