Sauce.vc, a consumer venture capital firm, has reached the final close of its third fund with a total amount of INR 365 crore ($43.6 million). This accomplishment goes beyond the initial inflows target corpus of INR 250 crore. Founded and managed by Manu Chandra, partner at Sauce.vc has constantly supported New Age innovative brands which has helped in the development of the consumer goods sector in India.
Image Source: Sauce.vc
Investment Portfolio
Sauce.vc has also invested in several promising businesses. Mokobara is a specific luggage brand focused on travelers of the present day. Whole Truth Foods is operating in the healthy snacking industry. Supertails is a pet care company. Bare Anatomy is an individualized hair care line.
Domestic and International Investors
Domestic and International investors supported the fund which includes but is not limited to Pratithi Investments, Sharrp Ventures run by Harsh Mariwala, Singularity Ventures, and Saison Capital. About 95 percent of the capital was sourced locally and of this, about 80 percent was from existing sponsors who had invested in Sauce.vc’s earlier funds.
Strategic Approach
Sauce.vc will continue to invest in many early-stage consumer brand companies. Pre-seed, Pre-revenue Bets are the funds that remain invested into businesses during their early-stage development. Average Cheque Size, an investment which usually hovers around INR 5 crore. Follow-on Reservations which is about 75% of the fund is allocated for reinvestment in the existing portfolio companies.
Growth Strategy of Sauce.vc
Sauce.vc’s development plan is based on the development of consumer brands at the early stages of their development and the promotion of innovation. Sauce.vc focuses on funding disruptions in industries that cater to the customers, including new markets and products. The funds are also involved in offering financial assistance to startups in their infancy to help them expand.
Sauce.vc on average invests about INR 5 crore per company and they maintain a diversified portfolio. A considerable percentage of the fund is kept for subsequent rounds of investments in portfolio companies. It maintains customer relations to create a strong foundation for the growth of business. Yet, although relative industries are not pinpointed, Sauce.vc supports consumer brands across a range of categories including apparel, personal and pet care. Sauce.vc’s development plan involves investment in key sectors, diversification over sectors, and fostering consumer innovative firms.
Impact on the Indian Startup Ecosystem
Due to its concentrated effort in making pre-seed as well as pre-revenue investments, Sauce.vc is a significant source of funding and support for new ventures in their infancy. This support can help to shift their growth trajectory. Backing the new generation of consumer brands fosters disruptiveness. Startups operating in this space tend to offer new products, services, and a business approach, which enhances ecosystem volatility. Sauce.vc’s portfolio comprises several segments, including apparel, personal care, and pet care. Such diversification only benefits the startup space as it ensures there is competition and that entities can adapt to different circumstances. Committing a large part of the size of the fund for follow-on investments guarantees continued involvement with the funded businesses. It fosters stability, which is ideal for long-term planning and expansion of the business. Well-executed fund closures are indicative of a bright future for the Indian market and good returns on investments. Other venture capital firms may also copy it to spur more development among start-ups.
Conclusion
Starting from its third fund which is Sauce.vc has already financed four deals across segments of apparel, baby care, personal care, and veterinary. The firm has a deep pipeline, supporting both traditional promotion underpinnings and new-gen founders. With the focus gradually shifting to the direct-to-consumer segment, Sauce.vc’s determination to support innovative consumer business initiatives continues to be strong. On a strategic level, the set goals and the strict adherence to a concrete plan augur well for the fund’s continued success.
