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Training Focus on D2C 2.0 Singal to support companies that connect India to Bharat

By Deepa Vaidya

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Fluid Ventures

The general sentiment among investors in the past couple of months has been to conserve cash. They are in no rush to close deals. Given this, Amit Singal, Founding Partner, Fluid Ventures shares his take on the supposed cash-crunch start-ups are staring at.

Says Singal, "I think there have been a lot of negative whirlwinds across the startup ecosystem in the past few months. But I feel founders should only be focusing on building sustainable business instead of listening to all these distractions. Irrespective of current sentiments, enough capital is available in the market for the founders that are creating a dent in the market."

This confidence stems from, "Fluid Ventures has always been investing only in the best of the profitable and scalable companies and we will continue doing the same,"says Singhal.

"Most of our portfolio companies have enough capital to go through this patch and are in a comfortable space at this point. Having said so, we are participating in the on-going rounds of a couple of portfolios," he adds.

But he admits that all is not well with start-ups looking to raise funds.

"Yes, we are seeing many startups raising bridge rounds because of the sentiments in the market and I feel that will continue for a few more quarters as startup founders have understood the importance of conserving cash at irregular times as we saw doing Covid breakout. Definitely, newer investments are taking a bit more time in closure because most of the funds are spending time managing their portfolio as priority."

He adds, "Lately, we have witnessed an increase in acquisition cost in consumer brands across all stages and to keep burn under check, we suggest companies to focus upon channels with higher ROI and with minimal experimentation."

He adds, "Raising Series A and Series B rounds (anywhere b/w USD 3M to 15M) are the most challenging rounds because during this fundraise, the founder is really tested across his approach of building a relevant scalable business and brand together."

So, what does their portfolio look like in crisis? Says Singal, "Our thesis has always been to invest in sustainable digital first consumer startups that are at a minimum monthly recurring revenue of INR 45 lakh, not restricting ourselves to a sub-category at this point of time. Any product which is for the masses excites us and we would like to continue the same philosophy."

With so much happening, does that warrant recalibrating valuations as an investor? He says, "As a fund, our focus has always been on the healthy unit economics of the business and because of that we have been able to drive founder-friendly valuations, hence we don't need to recalibrate on the valuations and will follow the same methodology for our investments."

On their funding outlook for the coming year, says Singal, "Great founders are here to stay and as a fund manager my responsibility is to back them irrespective of how the market sentiments looks like. Funding will happen but the priorities of investors have changed. They are now looking at businesses with good margins and disciplined financial management. We are focusing on products which connect India to Bharat and for masses. We called this as D2C 2.0."

Fluid Ventures : Factsheet

  • Year of establishment : 2021
  • Portfolio Size - 6 companies
  • Avg. Ticket Size/Sweet Spot – INR 2 crores to 4 crore
  • Tot. No. of Exits- Nil (we launched our fund in July 2021)
  • Total AUM - INR 51 crore
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