DSG hits $30m first close on third consumer fund

The vehicle has an overall target of $50 million and a hard cap of $60 million, according to Deepak Shahdadpuri, DSG’s founder. He expects a final close to come in June. The firm also plans to raise a second annex fund to participate in follow-on rounds for existing portfolio companies. DSG raised $20 million for the first annex vehicle in 2017 and it is now fully deployed.

Commitments to the first close of Fund III primarily came from existing LPs, including family offices and other institutional investors from Europe, Singapore, and the US. DSG raised $24 million for Fund I in 2012 and then closed its second fund at $50 million in August 2017. In between the two fundraises, Everstone Capital bought a 50% stake in the GP.

The transition from Fund I to Fund II saw a significant change in the LP base. Having previously relied on contributions from high net worth individuals, DSG brought in four institutional players: Verlinvest, which represents the families behind AB InBev; Mousse Partners; UK-based multi-family office ACPI Investment; and the Chanrai family, which founded Olam International.

DSGCP has backed over 40 companies since 2013, realized $60 million, and made distributions of $46 million via full or partial exits from Oyo Rooms, Veeba Sauces, Redmart, and Zipdial. Fund I has a distribution to paid-in (DPI) of 3.7x and a gross IRR of 63.5%.

“Most of the commitments have been, and will be, from existing investors as we continue to keep our flagship fund small and relevant to fit our early-stage strategy. We started the business with a hypothesis that we will see many new emerging brands in new categories or challenge the incumbents and this hypothesis has played out,” said Shahdadpuri.

Other DSG portfolio companies include Epigamia Greek yogurt, Raw Pressery cold press juices, Chope, Mswipe, Eazdyiner, YouVit, SaladStop, GOQii, and Piccolo baby food.

The firm has also made two additions to its investment team, bringing in Hariharan Premkumar and Archit Vijoy. Premkumar previously worked with Peepul Capital, Veda Corporate Advisors, Rothschild Private Equity and Accenture. Vijoy’s past experience includes PwC, Mercer and Pharus Advisors.

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