Daring enough to look at a world outside tech, Kanwaljit Singh, founder of Fireside Ventures invests in early-stage consumer startups that offer urban-centric solutions. A marketing maestro from Unilever and Intel, and with over 10 years of experience as senior MD of Helion Ventures, Kanwaljit Singh brings to the table significant knowledge of building successful brands.
Bombay Shaving Company, Samosa Singh, Boat Lifestyle, Mama Earth, Yoga Bar and Magic Crate are some of the startups he’s invested in.
With a fund of INR 340 crore, he hopes to have at least 20 – 25 companies in his portfolio by the end of 2020. With 50% of investments in domains like education, lifestyle, fashion and FMCG, Kanwaljit’s next focus in on health and wellness, personal care and beverages.
Kanwaljit Singh shares his view on the consumer startup segment in this candid interview with Atish Udayashankar, founder of Skapari, at Startup Saturday held by Headstart.
Why are you investing in the consumer sector now?
We’ve been identifying interesting and unique consumer products since 2015. The concept of kirana stores has changed completely from what it used to be. Supermarkets have taken over and there’s space for all types of products in the market.
Today, it is much easier for a new brand to enter the market than before. All this has created a positive effect and a conducive environment to explore investment opportunities.
What do you look for while shortlisting consumer startups to invest in?
We try to identify what aspiration a particular consumer brand is able to fulfil for the consumer. Today, it’s not just about problem-solving but it’s about being able to do things better than before.
“Consumers want to think better, eat better, look better, and live better.”
In terms of sectors, when we started we had a very specific theme of food & beverages segment. But soon we saw the scope of lifestyle, home and décor, health and wellness and our portfolio covers many brands from these sectors.
What is the potential of this market? Isn’t it already saturated?
Large companies like the P&G and Unilever are big conglomerates. They will not be able to cater to specific need gaps and address niche segments. The startups we’re looking out for fall in this bracket. They have been able to address needs that cannot be solved through factory-based production.
Secondly, consumers are buying into the story of the founders and entrepreneurs who are driven by specific stories or causes. The digital medium is enabling this in a big way.
How important is technology in the world of consumer brands?
I believe there is no such this as tech and non-tech. We have advanced so much with our tech that its entered every aspect of our lifestyle. For consumer brands, technology has been a very big enabler, allowing products to reach newer and bigger markets.
Technology has also helped us understand our customers better, giving us deeper insights into behaviour patterns. The business of selling consumer products is much more complex than selling services, and technology has seeped into every part of our manufacturing, sales and marketing processes.
In 2019, what are the pain-points that startups should look at solving?
There is increasing interest in the health and wellness segment and that’s where startups should be searching for new ideas.
However, the children’s category is also of high potential, as the market for kids as consumers is growing. With parents wanting to spend more money on their children there’s a big unexplored market.
For example, even with India’s high rate of population, there are only 2 kids bicycle brands in our country.
Why did you choose to invest in product brands and not services?
We chose to go the product route because the ecosystem of building brands in India has become easier. What you need is in deep consumer insights and behaviour analysis.
For example, Boat, a wireless audio speaker company did consumer mining on amazon and found out people want speakers with high base and high volume.
The belief was consumers didn’t want cheap products but they didn’t want something expensive like Sennheiser either. With this information they launched a range of products.
And today, in 3.5 years they’re one of the top ten brands in their category on Amazon with over 150 crores in revenue.
And the best part is they have only 18 people on rolls with maximum work outsourced.
Where does the consumer startup ecosystem stand today? How do you identify trends?
The consumer startup segment is very new and we’re still finding our feet and resolving issues on the go. A lot of the analytics we do was put together by a friend of mine – Hari Menon of Big Basket. This has helped us create a structure to identify potential market segments and customers.
Also, there’s no pre-existing distribution system that we can fall back on, so we’re creating this on the go as well. However, there is lot of interest from corporates who are eager to help but are unsure about how to do it. We can expect to see some concrete changes within the next 5 – 7 years.
Similarly, to identify trends or growth potential it’s crucial to be where the action is. Consumer brands are a lot about touch and feel.
Are you investing in consumer brands that cater to India 2?
We have a bias towards India 1 as it is easier to build these brands here. Building differentiation through product is difficult to do in tier 2 cities. However, there are some brands who are exploring these options.
For example, Paperboat a premium drink business in major cities has launched a sub brand called Paperboat Swing for rural markets, where they sell for Rs 10 in the wholesale market.
There are also new opportunities in the rural market. A company called StoreKing offers distribution support to brands by partnering with small towns and rural villages. They’re disrupting the distribution format by showing products in villages and aggregating them for these customers.
What is the one piece of advice that you would like to give startups?
Come up with exciting brand ideas. Our business is a dichotomy of both the excitement of doing something immediately and creating something for the long run. If you get your building blocks right, there’s nothing to stop you.
Contributed by: Ashika Devi
Volunteer, Headstart Bangalore