Early-stage VC firm RPSG Capital Ventures closes second fund at Rs 550 crore

RPSG Capital Ventures, an early-stage venture capital fund that focuses on consumer-oriented startups, has closed its second fund, Fund II, at Rs 550 crore.

Notably, The fund was oversubscribed, with investor interest exceeding 150% of the target fund size. To accommodate this high level of interest, the firm exercised the green shoe option.

The fund's investor base mainly consisted of domestic investors, including family offices, high-net-worth individuals, and industry veterans from the consumer sector.

Who are the investors?

The investor base for Fund II includes many repeat investors from previous funds. The RP-Sanjiv Goenka (RPSG) Group, which backs RPSG Capital Ventures, also doubled its initial investment as the anchor investor.

 "We’re focused on generating returns for them and remain committed to our investment fundamentals of creating a focused and limited portfolio with strong underwriting filters," said Abhishek Goenka, Managing Partner at RPSG Capital Ventures.

RPSG Capital Ventures fund II investments

With the new fund, RPSG Capital Ventures has already led investments into several consumer-focused businesses.

These include pet care platform Supertails, oral care brand Perfora, and drinkware and foodware brands Rabitat and Headway. The firm plans to continue investing in consumer businesses with solid unit economics, differentiated positioning, and strong teams.

Goenka highlighted this strategy by saying, "With this new Fund, we’ll continue to invest in new-age consumer businesses that have solid unit economics, differentiated positioning, and strong teams."

What is the broader context of this fund closure?

The closure of Fund II comes at a time when venture capital funding in India is showing signs of recovery after a tough period.

According to the KPMG Venture Pulse Q1 2024 report, VC funding in India rebounded to $3.2 billion in Q1 2024 from a low of $1.6 billion in Q4 2023, the lowest since Q4 2016. The number of deals also increased from 313 in Q4 2023 to 354 in Q1 2024. This recovery is notable as many new VC funds are now focusing on profitability rather than cash burn.

Notable investments

RPSG Capital Ventures has backed 16 startups so far, boasting a success rate of over 90% in its portfolio, which includes brands like The Souled Store, mCaffeine, Vedix, SkinKraft, Plix, and True Elements.

The firm’s approach and the recent closure of Fund II reflect a broader trend towards supporting consumer startups with robust economic fundamentals.

The firm typically invests in digitally native consumer businesses across various sectors, including food and beverages (F&B), beauty, health and wellness, entertainment, lifestyle goods, and consumer enabler categories.

RPSG Capital Ventures usually enters the Series A funding round, providing initial cheques ranging from Rs 10 crore to Rs 40 crore.