Over the next 4-5 years, 250-300 consumer brands are expected to join the Rs 100-crore revenue club, reports ET Retail

As the first wave of D2C companies matured, there was a common understanding of how these companies needed to be built. So, founders are now approaching brand building with a sharp and appropriate temperament. In the next 4-5 years, around 250-300 brands are expected to cross the Rs 100 crore revenue mark, Chirag Chadha, Head, Consumer Brands, Elevation Capital, and Amit Aggarwal, Head, Consumer Tech, Elevation Capital, told ETRetail. There are at least 20 to 30 D2C brands that are already profitable, and hence have already started emulating what public market companies look like, even in private markets in 3-4 years.

“Founders and early growth investors now believe that the opportunity in India is here and it’s there for the taking. So, there is no rush to reach Rs 500 crore revenue level in three years. They believe that the categories they are present in will grow. So the question is whether you can reach Rs 500 crore revenue level with reasonable profitability and with the right capabilities,” Chadha said.

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According to Elevation Capital, categories that have seen an increase in demand following the COVID-19 pandemic include pet care, luggage, home and new technology platforms.

“We have seen a 25-30 per cent growth in the luggage category post the COVID-19 pandemic and going forward, the household and pet care segments are expected to grow by 60-70 per cent in the current market scenario,” Chadha said.

In addition, there are many enabling factors that fundamentally drive new business and the creation of new brands.

“Today’s affluent consumer is willing to pay a disproportionate amount for high-quality products, services and experiences. They expect brands to have an omnichannel and multichannel presence,” Aggarwal added.

Currently, Elevation Capital, which is the eighth fund at $670 billion and invests across business cycles, has invested in 54 consumer technology investments and 22 consumer brands to date. Over the past three years, it has made 22 new investments in consumer technology and consumer brands and has invested more than $750 million to date.

“Starting with our eighth fund, we invested in 12-14 brands last year and this year we will invest in 12-15 new brands at various stages of development,” Aggarwal said.

Elevation Capital invests in an average of 35–40 brands per fund.

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