“D2C businesses start to mature only at the Rs 600-1,000 crore level”. “Any founder saying they’re selling for synergy purposes at the Rs 50-100 crore level does not make sense”
“While scaling revenues from Rs 2 crore to Rs 20 crore is a 10X jump, the potential of the business cannot be gauged based on an increase that sharp”
One of the reasons why VCs are cherry picking D2C startup in the post-Covid world.
But the existing FMCG players are interested in the tech capabilities and customer database of these D2C brands and end up shelling 4-7x of revenue during the acquisition.
It’s a win-win for both D2C as well as FMCG.
D2C founders end up making more money than the CEOs of these FMCG companies make in a lifetime, and FMCG companies have the trendy products in their portfolio.
Original Post: https://www.linkedin.com/posts/saurabh-singh3994_d2c-consolidation-value-creation-for-fmcg-activity-7095771209526579200-udLE
Date: 11 Aug 2023