Goat, a moat ? 🐐
Casper Ctrl+Zzing its IPO, Indian Roll-ups on a spree, digital influencers!
👋 Hey!
Welcome to this week’s edition of GlobalBees D2C Pulse where we curate content on the direct-to-consumer (D2C) ecosystem in India. If you missed our previous editions, check them out here!
Last week the D2C world was whipsawed! The house of brands, Mensa became a unicorn in a span of < 6 months (with plans to go public soon) while Casper, the trendy mattress-in-a-box company aka D2C poster child was seen Ctrl+Zzzing its splashy public debut. Casper (once a unicorn) is being taken private by private equity firm Durational Capital Management at 1/4th of its former valuation, after an exhausting 2-year stint on the NYSE.
So, what really happened at Casper?? (PS: Category saturation ain’t the cause)
Reasons, you ask?
Elusive profitability leading to loss of investor interest
Run-of-the-mill retailer approach wherein Casper chased retail partnerships instead of expanding its own store network
Focus on marketing more than supply chain (No moat!)
Perpetually high SG&A causing distrust amongst the investors
Executives getting distracted by running their SPACs.
With this acquisition, Casper will be restructured, primed for profitability. But, this brand’s fate ought to become a cautionary tale for companies like Warby Parker and Allbirds, which are still unprofitable BTW.
Let’s talk about the Indian stallions now!
What’s in the news?
👏 Roll-ups killing it
Mensa has bagged USD 135 mn from existing investors, Alpha Wave Ventures and Prosus Ventures, taking its valuation to over a billion-dollar aka Unicorn status Woot Woot. Mensa has completed 10-12 acquisitions till date.
Upscalio marked its fourth investment with the acquisition of fast-moving consumer-durables startup, Hestia, founded in 2018. Hestia focuses on full household health from cold-press juicers to vacuum blenders. Another big acquisition in this space is an investment of INR 150 cr. led by Sixth Sense Ventures, in celebrity chef Sanjeev Kapoor’s kitchen appliances brand Wonderchef.
Also, Zomato, while not a roll-up, has been on an investment spree spending over USD 100 million for stakes in Shiprocket, MagicPin, Curefit with more investment in pipelines to counter Swiggy’s Instamart. Securities market regulator, SEBI has been watching this frenzy and has proposed rules to control spending of IPO proceeds on M&A, unless takeover targets are explicitly identified beforehand.
🌿 Crème de la Hemp
Hemp is a variety of cannabis sativa plant that has 20,000+ Industrial applications such as medicine, proteins, clothing & cosmetics. India’s Bombay Hemp Company (BOHECO) has taken upon itself the mission to revolutionize the use of hemp in the wellness space.
BOHECO makes hempseed-based foods, and personal care products such as body soap. Well, its ‘first-mover advantage’ as the provider of holistic wellness products empowered by hemp has been bearing lucrative fruits so far. Last week it raised USD 2 mn from Achin Kochar of the beauty products maker Vi-John Group. The market opportunity is huge to say the least - the Global industrial Hemp market size was estimated at USD 4.71 bn in 2019 and is expected to register a revenue-based CAGR of 15.8%. Snapshot of players in this space:
🥨Direct to home chips and dips
Wingreens Farms has raised USD 17 mn in a funding round led by Investcorp. While the company has had an omnichannel distribution strategy including B2B sales to chains like Domino’s and KFC, it now wants to double down on D2C. It also launched a D2C website featuring its products including ones from its recent acquisition of organic juice startup Raw Pressery that was acquired at one-fifth of its previous market valuation in a distress sale.
🍿Tech Bites
Google is pushing for shoppable videos on YouTube with social commerce increasingly proving to be the next wave of D2C growth
Ecommerce enabler GoKwik raised USD 15 mn
Niche Marketplaces Purplle (beauty) and EyeMyEye (eyecare) raised USD 75 mn and USD 2.75 mn respectively
Brands that caught our eye!
🐐Making Goat a moat
We find it really funny how every other day we get to hear about a new ingredient that has a million different benefits and is said to certainly change our lives - be it onion oil, retinol, or seaweed. Here’s the new big thing Goat Milk. Goat Milk is naturally rich in vitamins (like Vitamin A) that are good for hair and skin.
We came across a brand called The Hade that offers ingredients-based hair and skin solutions including goat milk, saffron, and papaya. Gone are the days when Nivea cream used to be a go-to for all family members. Now each can shop differently basis concern, ingredient, application type etc. etc.
🌶️ Sugar and spice, and everything nice!
Who thought it was possible to create chocolates with one of the spiciest chilis in the world - the Bhut Jolokia Chilli? Well, Soklet does. This tree-to-bar chocolate maker has its own plantation from where they get their cocoa beans making it a ‘Single Origin’ chocolate brand and offer interesting flavours of chocolate. Other flavors include candied ginger, filter kaapi, Hisbiscus! Also, its vegan.
Trend of the week: Virtual Influencers 🤖
We’ve been seeing a new kind of influencer on social media, the ones who don’t age, throw tantrums, or have any geographical limitations - Virtual Influencers! Virtual influencers are animated or Computer Generated Imagery (CGI) based characters digitally created by marketing firms/ brands as a substitute for human influencers.
Blurring the lines between fantasy and reality, these stars are hugely popular with Gen Z and will yield increasing power as interest grows in the “metaverse". The biggest virtual earner is believed to be Lil Miquela, the LA-based “robot It-Girl" who has worked with Prada and Calvin Klein, and makes an estimated USD 7000 per post.
The global influencer marketing platform market size is expected to reach USD 84.89 bn by 2028 and we expect our VR buddies to take away a significant bite of it. Check out some of them here:
Reads & Recommendations
Understanding the business model of WOW and Mamaearth by The Ken
Running Ads by Julian Shapiro
Design strategy at Kapiva by The Hard Copy
That’s all for this week!
Stay tuned for more insights about the D2C start-ups in India. Do share your feedback and have a bangin’ week.
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