On 6 December, 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 Mumbai-based 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”.
Mensa, founded earlier this year, became the fastest Indian unicorn (a startup valued at over $1 billion) this year. It focuses on fashion, beauty and cosmetics, and home furnishing category. The company plans to acquire close to 40 brands over 12-18 months and is closing another eight deals in the near term, founder and CEO Ananth Narayanan said in a recent interview.
The brand aggregators acquire companies across sectors and industries, in which they give founders of the brands or companies they are acquiring a lucrative exit while consolidating some variable costs like accounting, workflow management and administration.
Darpan Sanghvi, founder and CEO of Good Glamm Group, said the aggregators understand the needs of online consumers better. “We are able to have a dialogue with a consumer and understand needs and solve them. At Good Glamm Group, young, high-growth brands join the group to use our unique content-to-commerce business model in establishing a more direct and personalized relationship with the consumer through the group’s proprietary digital assets,” Sanghvi explained.
Sanghvi said mergers and acquisitions at Good Glamm Group are done strategically to cover beauty and personal care space. “One can never dictate terms, (else) the M&A will not work. It always has to be a win-win and a well-thought-out plan. At Good Glamm Group, we don’t view it as an acquisition; we view it as someone joining the Good Glamm family. That was one of the reasons we created the Mothership over MyGlamm so that it’s not MyGlamm acquiring someone, but all the brands, including MyGlamm, are part of the Good Glamm Group,” Sanghvi said.
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