Micro VC firms are emerging rapidly. Unlike large Venture Capital firms, micro-VC’s nurture small corpuses and are dedicated to funding early-stage start-ups with seed rounds, something that’s hard to acquire from bigger VCs. They cater to niche markets and play a vital role in boosting the start-up ecosystem in these markets.
Who is Fluid Ventures?
Fluid Ventures is an early-stage Micro VC (venture capital) firm that’s registered with SEBI (Securities Exchange Board of India) as an Alternative Investment Fund Category – I VC fund. Launched in 2019, Fluid Ventures was initially poised to work with start-ups in the B2B and B2C space. They provide financial capital and have a robust start-up support system for recruitment, marketing, accounting, taxation, compliance mentoring, CXO coaching, fund mobilisation, and legal services.
Fluid Ventures advisory board consists of stakeholders including Manish Aggarwal, co-founder of Start-up Buddy, Prashant Narang, co-founder of Agility ventures, Chittransh Verma of India Partner Arc Group, Rakhee Singal, Compliance Officer of Start-up Buddy and Divij Bajaj, CEO of Power Gummies.
Their tryst with the D2C segment
Fluid ventures has completed the first close of their debut D2C (direct-to-consumer) focused fund. This fund will invest in D2C brands and its first close has occurred at INR 25 Cr published and a tentative INR 30 Cr for D2C start-ups. Their first scheme is in collaboration with Start-up Buddy and Agility Ventures. A category I fund, it has a target corpus of INR 80 Cr. Offering a check size of up to INR 4 Cr, Fluid Ventures will fund 15-18 emerging D2C brands within the next 3 years. Homegrown consumer start-ups stand a chance of winning checks from this investment fund.
Why they are funding D2C
Indian D2C brands have raised more than $2.04 Billion since 2014 and this segment is the next big wave in India. Owing to limited funding options available in the market for D2C currently, Fluid Ventures is hoping to bridge the gap. Amidst the pandemic, D2C and vertical commerce start-ups have instilled confidence among investors towards e-commerce. Between the first quarter Q1 of 2020 and the second quarter Q2 of 2021, total funds raised by D2C start-ups registered an average quarterly growth of 93%. Besides, India has one D2C unicorn which is significant since there are only 20 other D2C unicorns abroad. Through this initiative, Fluid ventures wants to encourage large investors to create more success stories in this segment.
D2C categories and funding rounds they are interested in
Fluid Ventures wants to invest in segments like food and beverages, beauty, personal care, lifestyle, home products in D2C. They are looking forward to participating in Seed, Pre-Series A, Series A and follow-up rounds for start-ups.
Noteworthy start-ups in India offering conversational AI and voice based B2B solutions.
What’s in it for me?
Category I funds like Fluid Ventures that come under SEBI’s AIF regulations include social impact funds, Venture capital funds, and infrastructure funds. AIF funds that target niche segments are a boon to the industry. This is because the investors on board already have an eye for recognising promising start-ups that deserve funding and you will gain instant exposure without facing cut-throat competition.
While trying to attract funding from micro-VCs and AIFs, take a look at their portfolio. Chances are you will find a number of start-ups with similar business models. Adopt their strategies to be a part of the ecosystem and to become eligible for funding. A lot of venture capital firms have floated new funds this year for specific markets like D2C, Agritech, etc. These micro funds are a great opportunity to easily acquire seed funding and close more initial funding rounds with ease. Since these funds go easy on start-ups approaching them owing to their early stage, if you have a solid idea backed by a profitable strategy, it’s possible to acquire funding.