"Dry powder is available in large quantities" According to Vinay Singh, Co-founder & Partner, Fireside Ventures, while late-stage funding, especially at a series C and above is going to be tight, great companies, growing very fast, with good unit economics will continue to attract capital.

While the domestic money supply situation looks robust with a lot of domestic institutions and banks opening up their purse strings, late-stage funding is still going to be tight, believes Vinay Singh, Co-founder & Partner, Fireside Ventures. "Dry powder is available in large quantities. But late stage funding, especially at a series C and above is going to be tight. There are going to be recalibrations. On the other hand, great companies, growing very fast, with good unit economics will continue to attract capital. It doesn't matter what the economic cycle looks like. If it's a great company, they will find investors investing in them," says Singh.

So is this six year old fund focused on Direct to Consumer (D2C) brands also looking at some recalibrations? "We have slowed down a little bit given how hot the market was. But it's not a big correction, 1x or 2x revenue multiple difference between then and now. We are an early-stage fund, and in many cases the first check. And essentially at that point of time it's about having enough skin in the game for the founder to keep interested for the long term," adds Singh.

The fund is bullish about beauty and personal care and continues to invest in that. "Additonal to that, in fund 2, we have made investments in wellness segment. That theme has played out very well. We continue to look at consumer healthcare, diagnosis at home, and preventive healthcare."

In the year ahead, the fund is excited about investing in categories like virtual consumption. "Increasingly, especially the younger consumer (Gen Z), is spending on in-game, in-app purchases OTT, NFTs or some virtual gifts. And that percentage is increasing as you go lower down in the age group in terms of discretionary spends. We have made some investment in gaming firms from fund 3. We continue to look at other forms of virtual consumption."

Singh believes that consumption across categories, especially post pandemic has taken a step up. The fund has put on hold investing in companies that saw a huge uptick during Covid-19, especially companies in the space of immunity and hygiene etc.

"Those are the categories where we have adopted wait and watch and see how they pan out in the long or medium term before we invest in new companies in those categories. I think there is enough opportunity for consumption. Most of the lead indicators of demand are talking about
good consumption this year. But when we are redeploying, we make sure it is going to help the company scale to the next level," says Singh.

Also, Singh believes that it is great time for deal making. "We are not in a 2020 panic state now. Its a great time to do deal making. There is a lot of validated deal flow coming through. If we miss this bus, we will pay a high price when the economy bounces back," concludes Singh.

FACTSHEET

No. of startups invested in: 34 (18 investments from Fund I, 14 investments from Fund II, and 2 investments from Fund III)

No. of exits: 5 full exits and 5 partial exits.

Focus sectors: Emerging new consumer brands across the spectrum of food & beverages, Beauty and Personal Care, Health and Wellness, Lifestyle, Home, Fashion, Pet Care, virtual consumption, etc.

Fund Size: Fund I - $50mn Fund II - $118mn Fund III - $225mn

Ticket Size: Early-stage investor, like to come in at Pre-Series A with a $1-$2mn cheque and keep doubling down across multiple stages