Kanwaljit Singh: The Accidental Venture Capitalist Fuelling India’s D2C Boom

Kanwaljit Singh, an unconventional venture capitalist, has played a pivotal role in nurturing and accelerating the growth of direct-to-consumer (D2C) brands in India. His journey into the world of start-ups began with a fervent belief in passionate founders, leading to an impressive track record of investing in some of India’s most successful consumer brands. This article delves into Singh’s unique approach to investment, his instincts, and the significant role he plays in the D2C revolution.

Back in 2010, Neeraj Kakkar, with a background at Coca-Cola India, found inspiration under Singh’s guidance during his summer internship at Helion Venture Partners. Singh’s belief in Kakkar’s entrepreneurial potential led him to encourage Neeraj to start his venture, despite Helion’s initial reluctance to invest in a non-tech start-up. Singh himself wrote a check of Rs 25 lakh, making it his first individual investment. This marked the beginning of Singh’s personal investment journey, driven by instinct and a passion for disruptive ideas. Singh’s investment philosophy boils down to the founders’ passion and obsession with their ideas. He believes in backing founders who are “all in” and view their venture as a life-and-death commitment. This approach has allowed him to spot promising jockeys, those with the determination and vision to drive their startups to success. It’s this instinctive approach that has set Singh apart in the world of venture capitalism.

In 2016, Singh transitioned to institutional investment with the establishment of Fireside Ventures. The fund’s approach combines structured investments with Singh’s intuition and revolves around key factors: a large market that can be disrupted, a differentiated product, and the ability to sustain innovation. The ticket size of investments has increased, ranging from Rs 7 crore to Rs 14 crore, and Fireside now holds at least a 20% stake in the startups it backs. Singh and Fireside have found their sweet spot by investing in startups that generate approximately Rs 50-60 lakh in monthly revenue, valuing these businesses at around Rs 30-40 crore. While aiming for substantial returns, Singh remains realistic, targeting 5x or 10x returns in the majority of cases. The fund’s pace of investment is deliberate, ensuring thorough due diligence.

Although Singh’s instinctive approach has been a major asset, there have been instances where his biases may have led to missed opportunities. He acknowledges that founder conflicts pose significant challenges and can have a detrimental impact on a start-up’s success. Further, the temptation of exaggerated valuations and overcapitalization remains a concern within the industry, as it can lead to undue pressure on start-ups to justify their numbers.

Conclusion:

Kanwaljit Singh’s journey from accidental venture capitalist to institutional investor has left an indelible mark on India’s D2C landscape. His instincts, unwavering belief in passionate founders, and a structured approach have contributed to the success of several consumer brands. Singh’s commitment to driving the growth of disruptive businesses underscores his vital role in fuelling the D2C boom in India, making him a significant figure in the country’s start-up ecosystem.