‘House of brands’ biz strategy winning big
ABOUT SEVEN THRASIO-LIKE STARTUPS HAVE EMERGED IN INDIA
MUMBAI: Investors are pouring millions of dollars into Indian startups aggregating small but promising online products, hoping to scale them into large global brands.
On December 6, UpScalio announced investment of an undisclosed sum in four auto accessories brands—Autofurnish, Destorm, Urban Lifestylers, and MotoTrance. It had earlier invested in Green Soul Ergonomics, Polestar, Trase, and Hestia. On the same day, Mensa Brands said it acquired Mumbaibased home décor and kitchenware brand Folkulture for an undisclosed amount, making it its 13th acquisition in 2021. And just last month, GlobalBees Brands added three more startups to its portfolio list in November. It picked up a majority stake in a dietary supplement’s maker Healthyhey, hair care products brand Rey Naturals, and eyewear brand Intellilens for undisclosed amounts. These acquisitions took the number of brands that GlobalBees has acquired in just 4-5 months to eight.
Startups like UpScalio, Mensa Brands and GlobalBees Brands have something in common— they all follow the brand aggregation model similar to that of Thrasio Holdings Inc., a US startup that bet on the concept of economies of scale by acquiring and consolidating third-party sellers on Amazon in the US. The aim is to help portfolio brands grow faster, save costs and give brand founders an attractive exit. About seven such startups have emerged in India. And more people in India searched for the word ‘Thrasio’ than in its home country in September, data from Google Trends shows.
Take the example of GlobalBees, founded by FirstCry founder Supam Maheshwari and Nitin Agarwal, a former executive of Edelweiss Financial Services, with a corpus of $75 million. It aims to invest in 30-35 brands ranging from online-only products to fast-moving consumer goods. GlobalBees is planning to invest in more than 20 brands by the end of this financial year.
Similarly, UpScalio—founded by Gautam Kshatriya, a former consultant with McKinsey and Co.; Saaim Khan, a former consultant at Bain and Co.; and Nitin Agarwal, a former marketing and growth executive at Purplle—provides funds to digital brands selling on e-commerce marketplaces like Amazon, Myntra, Flipkart and Nykaa. It manages their key operations, including multi-marketplace management, digital marketing, branding, logistics, sourcing, finance, and business operations. Another such startup, 10club, raised $40 million in a round co-led by Fireside Ventures, a prominent Indian investor in consumer and hardware tech space.
Vinay Singh, a partner at Fireside Ventures, said the firm believes “digital consumption straddles many more categories, each of which may not meet our criteria for investment. But a roll-up model like 10Club could effectively serve the needs of such brands as well. Think home and kitchen, garden, pets, sports, baby and more, niche categories, but together can form very interesting very large outcomes”.