L'Oreal commits to DSG's latest India, Southeast Asia fund
DSG Consumer Partners, an early-stage consumer sector investor in India and Southeast Asia, has signed up French cosmetics giant L’Oreal as an LP in its fourth fund.
The fund reached a first close of approximately USD 63m last year against an overall target of USD 120m. Most of the participants in the first close were existing LPs.
L’Oreal’s commitment comes from its corporate venture capital fund Business Opportunities for L'Oreal Development, or BOLD. The vehicle takes minority stakes in innovative companies and brands with high growth potential. Focus areas include consumer, marketing, digital, retail, communication, supply chains, and packaging.
Vismay Sharma, L’Oreal’s president for South Asia Pacific, the Middle East, and North Africa, noted the rapid growth and attractive demographics of Southeast Asia and India. “The future of consumer brands will largely be shaped in these markets. So it's important to build a strong connection to its dynamic ecosystem of disruptors and invest in promising consumer brand start-ups," he said.
L’Oreal fellow Fund IV LPs include Wipro Consumer Care Ventures, the VC arm of India-based personal care products provider Wipro Consumer Care & Lighting. This is part of a concerted effort by DSG to attract more strategic investors with a view to gaining access to their insights and resources as well as creating a potential exit channel for portfolio companies.
DSG has previously won support from Verlinvest – an investment firm established by the founding families of Anheuser-Busch InBev – family offices, and institutional investors from Europe, Asia, and the US. The firm raised USD 24m for its first fund in 2012, USD 50m for its second in 2017, and USD 65m for its third in 2019. In 2018, Everstone Group acquired a stake in the GP.
Three annexe funds have been raised to date (USD 20m in 2014, USD 20m in 2016, and USD 37m in 2019), with existing LPs accounting for nearly all the capital. These vehicles are restricted to follow-on investments in existing portfolio companies. In addition, DSG created an early-stage programme within Fund III that sources investments through micro-VCs.
DSG makes early-stage investments, typically when companies have zero revenue and no product in-market. It claims that brands take 7-10 years to build. It is building out a portfolio operations team to provide support in areas such as consumer insights, branding and product design, and online discovery and distribution.
Photo: MTA New York City Transit / Marc A. Hermann
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