DSG Consumer Partners makes first close of Fund II at $35 million

NEW DELHI: Deepak Shahdadpuri-led investment firm DSG Consumer Partners (DSGCP) has made the first close of its second fund at $35 million.
The consumer-focused investment firm was an early investor in online hotel aggregator OYO Rooms, mobile point-of-sale payment services provider MSwipe Technologies and tea retail chain Chai Point.

The fund, DSGCP II, which counts Verlinvest, the Belgium-based investment holding company created by the founding families of Anheuser-Busch InBev, as one of its anchor investors, has targeted a corpus of $40 million (about Rs 266 crore), with its hard cap at $50 million (Rs 332.6 crore).

It is also backed by a number of private equity professionals, including, Sameer Sain, co-founder of Everstone Capital Advisors, Alok Oberoi, co-founder of asset management firm ACPI Investments and Saama Capital founders Ash Lilani and Suresh Shanmugham, who have invested in their personal capacities.

“Fund raising started in January and we were on the road for about eight weeks. There is another group of investors, who are currently undertaking due diligence, who could also come on board,” Shahdadpuri told ET. Of the $35 million (about Rs 233 crore) raised till date, 60% has come from new investors, and the balance from existing backers.

In October last year, ET was the first to report that Mauritius-based DSGCP was looking to raise $40 million-$50 million, double the size of its current capital commitment, in fresh capital for its new investment vehicle.

DSGCP II will follow a similar investment theme as that of Fund I and invest in about 20 early-stage ventures across the broader consumer space, while looking to identify opportunities in health, fitness, nutrition, FMCG, financial services, fin-tech, food processing, dairy and alco-bev.

The fund made its first investment in cold press juice brand Raw Pressery in February, when it participated in an Rs 31-crore funding round, along with Sequoia Capital and Saama Capital.

“We are actively working on four-five deals, which are in varied stages of diligence and are hoping to announce the next one by May,” Shahdadpuri said.

The announcement of the first close of DSGCP II is the latest among a string of early-stage VC funds that are currently on the road to raise fresh capital for their new investment vehicles.

In January, Sateesh Andra-led Endiya Partners, which focuses on technology, healthcare and consumer services investments, reportedly marked its first close at $15 million (about Rs 100 crore). Unicorn India Ventures, which targets B2B (business to business) startups in social media, analytics and cloud segment, also announced its first closure at Rs 40 crore.

“We actually expected the (fund raising) process to be tougher. India continues to be an interesting story. While investors have been disappointed by returns from this geography, they have also earned outsized returns on occasions,” Shahdadpuri said.