Sanjiv Goenka – the Chairman of RP Sanjiv Goenka has made the headlines by creating a venture capital fund of $14.74mn (INR 1 Bn) for investment in FMCG Startups. (Fast moving consumer goods startups). Along with the investment in FMCG sector, Sanjiv Goenka has also been investigating for acquisitions in this sector. The target has been to extend the boundaries of company’s product portfolio and maximizing its geographical presence in the country.
Goenka, talking about this move to Business Standards, said, “if the companies are good, our inputs can help them scale up. At some stage they could become very good acquisition targets. He further added, “many of them will want to exit in three to five years, so then, we gave them an automatic exit option.”
From seed funding to taking equity stakes, Sanjiv Goenka is all set to take this business strategy to heights with his experiments. Too Yumm brand is already flourishing in the snacks market because of its savoury and healthy food. This is Goenka’s launch and he has also acquired a controlling stake in Apricot Foods for $64.8 mn (INR 4.4bn).
Along with Sanjiv Goenka, Ratan Tata (Tata Sons’ Chairman Emeritus), Mohandas Pai (Infosys Board Member) and Kiran Mazumdar Shaw (Biocon Chairman and Managing Director) have not escaped the list of big investors who are continuously extending the sphere of activity in this domain.
Investing money on startups helps in building a strong foundation for them for an efficient business productivity. Moreover, it brings different variety of products in the market, in trying to meet up to the consumer’s expectations every time. Other FMCG companies like Emami and Marico have also made their investments in startups recently. Helios lifestyle and Brillare are the startups in which Emami invested enhancing premium care segment.
If we envisage FMCG sector at present, it has become the largest sector in the Indian economy, growing at CAGR of 20.6% to reach $103.7Bn by 2020. In such a flourishing domain, which is accelerating speedily, Goenka’s move in raising more capital would certainly help in enhancing the productivity. Not only will this strategy open up gateways of new opportunities for the startups but also open up a plethora of employment opportunities for people and flooding of endless opinions.