|The RP-Sanjiv Goenka Group has created a Rs 1 billion venture capital fund to invest in fast-moving consumer goods (FMCG) start-ups.|
According to group Chairman Sanjiv Goenka, capital appreciation in the FCMG sector had led the group to come up with the fund.
"If the companies are good, our inputs can help them scale up. At some stage, they could become very good acquisition targets. Many of them will want to exit in three to five years, so then we give them an automatic exit option," Goenka told Business Standard.
Goenka is keeping his options open, ranging from seed funding to picking up equity stakes in these start-ups.
With an aim of expanding its product portfolio and increasing geographical presence in the country, the RP-Sanjiv Goenka Group has been looking at acquisitions. After launching the Too Yumm brand, it acquired a controlling stake in Apricot Foods for Rs 4.4 billion, which also helped it bring the eVita brand into its portfolio.
FMCG companies, including Marico and Emami, have invested in start-ups. Corporate honchos, including Tata Sons Chairman Emeritus Ratan Tata, former Infosys board member and Manipal Global Education Chairman Mohandas Pai and Biocon Chairman and Managing Director Kiran Mazumdar-Shaw, have also been active in this space.
Last week, Marico picked up a 22.5 per cent stake in Ant Farm-incubated fitness and holistic wellness platform Revofit in an all-cash deal. Recently, Emami invested in two start-ups, Helios Lifestyle and Brillare, to complement its own range of products, and foray into the premium care segment.
Based on the requirement, Goenka may raise more capital for the venture capital fund.