Mint has a feature, quoting growth figures from startups like Mamaearth and BoAT, on how some niche FMCG brands are gaining favor among consumers and also investors, post the Covid lockdowns.
Since June, Saama’s Lilani has begun to evaluate at least one new consumer brand investment every day. “Let me put it this way: in April, a down round was the best-case scenario for consumer brand startups; now, it’s the worst-case scenario for many," he said.
...That these companies are not only growing rapidly but doing so with higher net margins is helping their cause at a time when investors are demanding better unit economics at startups. Last year, consumer brand startups received $295 million in capital, up from $158 million in 2018, according to data with Venture Intelligence.
There are some common themes that are allowing startup brands to thrive. One, they were all relatively well-established in their categories even before the pandemic. Then, their products have now become especially attractive to shoppers (either demand in their categories on the whole has risen or because they are seen as value brands). Finally, most of these brands cater to the upper middle-class and rich segments, which have not suffered nearly as much economic pain as the lower middle-class and the poor.
