That Kanwaljit Singh, founder and managing partner of early-stage investment firm Fireside Ventures, has a keen eye for backing promising consumer-focussed companies that innovate for the all-powerful Indian millennial consumer, is evident from some of the investments in his portfolio. Singh, 55, was so passionate about investing in and nurturing consumer brands that he walked out of Helion Venture Partners (which he had co-founded; he was senior managing director) in 2015, since the rest of the team didn’t want to deviate from its focus of investing in technology-led companies.

After quitting Helion, he turned angel investor and was an early-stage investor in firms that went on to become well-known brands such as Paper Boat, Epigamia, and Licious. Singh, who spent 13 years in consumer marketing across companies such as Hindustan Unilever (HUL) and Intel India, soon realised there was only that much he could do as an individual investor and he needed to create an ecosystem to realise his vision of helping consumer-focussed firms grow through capital and mentorship. As a result, Singh founded Bengaluru-based Fireside Ventures in 2016 and by February 2018, the firm had closed its first fund of ₹340 crore with a slew of marquee investors including Westbridge Capital, Marico chairman Harsh Mariwala’s family office, Emami, Hero Enterprise Investment Office, ITC, and the RP-Sanjiv Goenka Family Office.

In an interview with Fortune India, Singh says through Fireside he is trying to foster a symbiotic relationship between his investors and investee companies. Fireside’s portfolio has 18 companies including Mamaearth, boAt, Yogabar, Bombay Shaving Company, and Vahdam Teas. While the startups benefit from growth capital and mentorship, the fund’s investors, many of whom have their own thriving consumer products businesses, get to learn from the latest trends in India’s consumer space.

Edited excerpts:

What was the thought process behind moving out of Helion and establishing Fireside Ventures?

I was always fascinated by the consumer space, I guess partly because of my background in marketing with HUL, and realised there was an emerging investment thesis on backing consumer-led companies. But it was difficult to build a consensus around investing in the consumer space at Helion and many of the investments that we would consider in this space would get a pushback internally. So eventually I decided to step out and invest my own money in some of these opportunities. I invested in some firms like Paper Boat, ID Fresh, and Licious, which went on to become successful consumer brands.

There was an interesting confluence of factors happening at that time. One was the rise of the aspirational and conscious millennial consumers. These consumers don’t care whether a brand belongs to a large company or a startup, as long as they buy into the narrative around the brand and if it meets their needs. For instance, I invested in a company called Mamaearth (which has since become a Fireside portfolio company) and the home page of its website talks about how a couple decided to start the company because of the difficulties they faced in sourcing good products for their baby. So their passion and belief system became a part of the brand.

The other emerging trend was that the ways in which these consumers access brands and products is very different. Digital plays a big role here and that drastically reduces the cost of marketing and distributing these new brands. Also, with the emergence of supermarkets in India, these new brands get an opportunity for prominent shelf space and are no longer tucked away behind products from well-known FMCG [fast-moving consumer goods] giants at local kirana stores.

But at the same time, there were very few institutional investors willing to back new consumer brands in India and I realised there is only that much that I can do alone.

Secondly, a system of learning and disseminating knowledge vis-à-vis the new rules of product marketing and distribution was needed to help these companies grow. I realised I cannot fulfil these two objectives without raising a fund.

Yogabar

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