Sauce VC, a New Delhi-based investment firm that has already funded new-age luggage brand Mokobara, healthy food startup The Whole Truth, and petcare provider Supertails, plans to collect Rs 250 crore for its third fund. This comes as D2C companies experience increased interest from risk capital investors. The firm aims to support 15-16 consumer brands in their early phases.
Sauce VC, a consumer-focused investor that has funded new-age luggage company Mokobara, healthy food startup The Whole Truth, and petcare provider Supertails, has announced its third fund with an objective of raising Rs 250 crore, according to founder and managing partner Manu Chandra.
The New Delhi-based investment firm gained approval from the Securities and Exchange Board of India (Sebi) for the new fund a few weeks ago, according to Chandra, who added that it plans to support 15-16 consumer companies in their early phases.
Sauce VC’s new fund comes at a time when risk capital investors, especially tech-focused organizations, are showing an increasing interest in the direct-to-consumer (D2C) industry, as ET has reported.
The fund will primarily raise funds from domestic limited partners, or sponsors of venture enterprises. Sauce VC is also trying to raise capital from its existing investors, who include family offices and consumer-focused corporations.
Sauce VC’s initial fund was Rs 60 crore in size and closed in 2019, with the second edition coming in 2021 with a capital of Rs 158 crore. The company has also set up a Rs 260 crore continuity fund to support winners from its previous vehicles.
However, Chandra stated that they were abandoning the idea of creating continuous funds and will instead make larger ticket size investments from the main fund itself.
“We want to remain consistent with this new fund in terms of stage, sector and size,” he stated. “Sauce now has a strong ecosystem and a tried-and-true strategy for taking brands from idea to Rs 150-200 crore size on a consistent basis. We made pre-revenue bets on Mokobara, Hocco Ice Creams, The Whole Truth, and many more companies, and we aim to identify many more fascinating ideas and creators to back during the ideation stage.”
Sauce VC would cut cheques in the Rs 3.5-4 crore range through Fund-III, up from Rs 2-2.5 crore deals through its previous vehicles.
“Ticket size has definitely increased,” Chandra stated. “When we started in 2019, there was no rapid commerce. Now that all of the last mile infrastructure, tech stack, and payment stack have been handled for consumer brands, brands are growing considerably faster.”
Sauce VC will continue to focus on the consumer area while keeping its corpus relatively modest compared to other venture firms.
