VCs chase a pot of gold as India's growing affluent class goes premium
Mint. “However, the increase in the number of people who can afford and the change in consumer demand towards quality has prompted our investment thesis to evolve." Peak XV (formerly Sequoia India and Southeast Asia) recently invested $12 million in Mokobara. Its consumer portfolio includes petcare startup Heads Up For Tails, nutraceuticals seller Healthkart, and home improvement firm HomeLane.
India’s “affluent" class is set to reach 100 million in the next three years, according to Goldman Sachs. As of January, the set of people earning greater than $10,000 per annum was 60 million, as compared to 24 million in 2015. The increase in wealth among high-earning individuals has led to a rise in top-end consumption in India and categories such as leisure, jewellery, out-of-home food, healthcare, and premium brands are expected to benefit.
Zoeb Ali Khan, vice president at early-stage investor Sauce.vc, said that the Delhi-based firm has always kept its eye out for premiumisation in the consumer category. “With the number of people demanding premium products is on the rise, consumer brands have a sizable opportunity ahead of them. The economics is the most interesting part of the proposition," he added.
Sauce.vc—that backed Mokobara in 2019, Supertails in 2021, and The Whole Truth in December 2023—is looking to invest in another premium consumer brand by the end of the year, Khan told Mint without further details. The biggest advantage of going premium is the ability to scale quickly. Larger order values help achieve better margins over time, helping brands lose less money on each order.
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