D2C companies find new homes in winter funding

“Large, traditional companies are realizing that they are losing out on the fast-growing D2C space and millennials or the ‘consumers of tomorrow’. Hence, they are looking to grow in this segment through organic and inorganic means.” Executive Director of Avendus Capital And Co-Head, Consumer Financial Institutions Group, and Professional Services, Abha Agarwal said, D2C Startup’s acquisition gives them access to digital capabilities, new age brands as well as a team.

Beauty and personal care, and food and lifestyle are likely to see a large number of acquisitions and consolidations in 2023. Agarwal attended.

In November, Aditya Birla Group made a series of investments in fashion apparel players under its platform TMRW to keep pace with the acquisition spree of its peers. It bought distressed fashion brand Bewakoof 200 crore deal It is also exploring opportunities to buy other lesser known and established brands.

In September, Emami said it wanted to focus on digital business, especially the D2C and EB2B segments. In March, the company bought a stake in TruNative, a D2C brand that sells food and beverages. Tata Digital had acquired BigBasket last year and earlier this month invested $200 million in the business.

For some big business houses chasing growth, acquisitions also matter. The deals include the distressed sale of Tiger Global-backed fashion e-commerce startup LimeRoad to V-Mart Retail Ltd and craft beer maker Bira91’s acquisition of The Beer Cafe in October. Aggarwal said the deals offer relief to these startups, which are looking to leverage the supply chain and distribution channel strengths of larger entities while meeting any immediate funding requirements.

Many D2C brands have realized that they will eventually need to take the omnipresent route in order to remain relevant.

“Firms are finding it difficult to grow without burning capital or going omnichannel in a big way. Valuations are also falling and funding is not easily available in the market as most funds have already taken stakes in large players. Abhinandan TS, director, Veda Corporate Advisors, said, “Players with poorer pockets will continue to be strong in this market and we will continue to see smaller and distressed deals.” Up the value chain, we will see more acquisitions,” said Dipanjan Basu, partner, Fireside Ventures.

Basu welcomed such strategic acquisitions as a favorable route for venture capital funds to exit these businesses. “We see this as a positive development where many of our companies can enhance their capabilities through inorganic means. On the other hand, we are presented with opportunities to exit brands that have grown well, ” They said.

,