Wipro Consumer Care intends to contribute Rs 100 crore to the expanding D2C startup sector

In 2023, Wipro Consumer Care and Lighting intends to invest at least Rs 100 crore in D2C companies, particularly those in the food industry.

"Up until now, we haven't looked at D2C companies, particularly in the food sector, but we are now more willing to do so. According to Chief Executive Officer Vineet Agrawal, "We are witnessing several promising businesses in this field and we are considering investing in them.

According to Agrawal, Wipro Consumer Care would act as a strategic investor, assisting startups with market access, raw material sourcing, financial management, and the development of research capabilities through its brand.

Startups are incredibly knowledgeable about their products, skilled at marketing, and knowledgeable about eCommerce, according to Agrawal.

"Acquiring startups is not our plan; it is not our immediate focus...

We'd rather put money into them. We still have about Rs 100 crore to invest out of our planned investment of close to Rs 200 crore, he said.

Agrawal added that, depending on the performance of prior investments, the Rs 100 crore may rise.

"We are willing to invest in food entrepreneurs, particularly snacking startups, as well as startups in personal care and hygiene. We won't buy more than 25% of the company and will only invest a maximum of Rs 25 crore in it, he continued.

Powergummies, the Ayurvedic company TAC, the men's grooming company LetsShave, and Indonesia's Youvit, which manufactures nutraceutical and health products, are a few startups in which the company has previously invested.

Wipro Consumer Care is not the only producer of packaged consumer goods to fund D2C companies, to be sure.

For instance, Marico has bought the snack manufacturer True Elements, the male grooming business Beardo, and the beauty line JustHerbs. Hindustan Oziva, a D2C nutrition brand, will be acquired by Unilever for $32 million, and the company will also purchase a minority position in Wellbeing Nutrition for $8.4 million. The owner of Soulfull is now Tata Consumer Products.

According to a top executive, TMRW, the house of brands initiative of the Aditya Birla Group, will spend Rs 500-600 crore in 10-12 D2C brands by the end of this year in an effort to grow to a $1 billion company.

As part of its expansion into the food industry, Wipro Consumer Care announced on Monday that it had acquired Kerala-based spice maker Nirapara.

Nirapara is our thirteenth acquisition, giving us a strong position in the spices and ready-to-cook market. We are thrilled to join a sizable market that is anticipated to grow, added Agrawal.

Numerous opportunities

The investments are assisting companies in part in overcoming a funding winter brought on by geopolitical and global economic concerns that are preventing venture capital and private equity firms from making investments this year.

The D2C food industry, according to Agrawal of Wipro, has a sizable potential market. For instance, the organised sector only accounts for 12 percent of the Rs. 70,000 crore market for spices.

Even TMRW, a subsidiary of the Aditya Birla Group, boasts that its eight new collaborations have helped it reach an annual run rate of more than Rs 700 crore and that it is on course to reach Rs 1,500 crore in the coming 12 months.

According to Shiprocket and the Confederation of Indian Industry's India D2C study 2022, the country's D2C market is estimated to be worth $12 billion.

The D2C market is anticipated to reach $60 billion by 2027, and India is predicted to have the third-largest economy by 2039. In just 3-5 years after debut, D2C brands are breaking the Rs 100 crore revenue milestone, according to the research.

The ecosystem's many D2C enablers, from product development to logistics control and customer service, are assisting in lowering startup entry hurdles.

Deal flow is still sluggish even though investors and FMCG businesses want to take a bigger piece of the D2C ecosystem.

Wipro Consumer Care's Agrawal said, "While we are remaining cautious in this climate, we are urging teams to access transactions that make sense and have the best route to profitability and development.