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DSG Consumer Partners makes final close of third fund at $65m

This will be the second successive instance of Verlinvest anchoring a fund launched by Shahdadpuri.
DSG Consumer Partners has made the final close of its third flagship fund at $65 million (about Rs 465 crore), and the first close of its second buildout fund at $35 million.

The consumer-focused investment firm, led by Deepak Shahdadpuri, will now have about $200 million worth of assets under management, doubling from when it closed its second investment vehicle two years ago.

DSG was the first institutional backer of SoftBank-backed hospitality firm Oyo Hotels & Homes, alongside Lightspeed Venture Partners. The Singapore-based investment firm had scored stellar exits from Oyo, having invested about $1.4 million in the Gurugram-based hospitality company, and reaping cumulative returns of an estimated $60 million over two rounds.

ET first reported on April 1 the launch of DSG’s Fund-III and the build-out fund - DB-II, which will participate in growth stage rounds of select portfolio companies.

The investment firm counts the likes of condiments maker Veeba, point-of-sale terminals maker Mswipe and cold press juice maker RAW Pressery, among its portfolio in India. When it launched in 2012, DSG Consumer Partners was a rare example of an investment firm focused on consumer startups and brands.

Shahdadpuri said Fund-III will scout for investment opportunities across personal care, baby, pets, alco-bev, snacking, vitamin supplements, travel and hospitality, financial services, wellness, fem-tech and sexual wellness segments.

“Fund-III will continue deploying the same strategy as the previous two funds. Looking for great entrepreneurs, building brands in white space or in segments where there has been little innovation over the years,” he said.

This comes even as other consumer-focused funds, such as Kanwaljit Singh-led Fireside Ventures and Sixth Sense Ventures, the investment firm helmed by Nikhil Vora, have come to the fore, and are either in the process of raising new funds or have closed their most recent investment vehicles.

DSG, which invests across India and Southeast Asia, counts Verlinvest, the Belgium-based family office of the founding families of Anheuser-Busch In-Bev, and Nigeria-based diversified conglomerate Kewalram Chanrai Group, among anchor investors.

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This will be the second successive instance of Verlinvest anchoring a fund launched by Shahdadpuri. The Belgian family office, which manages assets of about $1 billion globally, had earlier backed the $50 million DSGCP-II, which was launched in March 2017.

Separately, Shahdadpuri’s build-out fund will only invest in growth-stage rounds of the best companies from DSGCP-I and DSGCP-II where the flagship fund has hit its investment threshold.

The annexe fund, which has a target corpus of $40 million, and is expected to have its final close in November, will only invest in new rounds led by external investors.

“We expect DB-II to invest in the upcoming rounds at Mswipe, Veeba, Eazydiner, Chope, ChaiPoint, IndiaLends, Epigamia and others. These are the best performing companies from previous funds and want to be able to take up our pro-rata allocations and allow interested LPs to get growth stage exposure to some of the fastest growing brands,” Shahdadpuri said.
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