India's Mensa Brands secures $40m in debt, equity funding
Mensa Brands, an India-based platform that agglomerates emerging consumer brands, has received USD 40m in funding from EvolutionX Debt Capital structured as a debt facility and a convertible investment.
The company, which was established by Myntra founder Ananth Narayanan, became a unicorn in November 2021 on closing a USD 135m Series B round led by Falcon Edge Capital. Alpha Wave Global, Norwest Venture Partners, Prosus Ventures, and Tiger Global Management also took part.
This round came on the back of a funding spree for agglomeration platforms across the region. India was seen as especially attractive because it offers a large-scale single-market opportunity, multiple e-commerce marketplaces, and many small brands. In January 2022, GlobalBees, another local player, raised USD 111.5m in Series B funding at a valuation of USD 1.1bn.
Most rounds for agglomeration platforms comprised equity and debt, but the equity tap has since closed. Local media reported earlier in the year that several companies, including Mensa, were laying off staff. Last month, Thrasio – the US-based template for the agglomeration model of buying up small e-commerce businesses with a view to leveraging economies of scale – engaged restructuring advisors.
Mensa was founded as recently as 2021, but it had already made a dozen acquisitions by early 2022. The company now operates more than 20 consumer brands across fashion, beauty, and home products.
“The arbitrage in enterprise value between where rounds were happening and where platforms were buying assets was wide last year, so they snapped up a lot of brands. And then those early acquisitions have performed well, demonstrating improvement in growth and profitability,” Vinod Murali, a managing partner at venture debt provider Alteria Capital, which backed Mensa, told AVCJ in early 2022.
Mensa’s portfolio features wearables manufacturer Pebble, peanut butter brand MyFitness, perfume and personal care specialist Villain, and men’s lifestyle and apparel brand Dennis Lingo. The new debt funding from EvolutionX will be used to continue investments in brand building.
“We are excited to partner with Mensa as the company continues to scale revenues and margins of digital-first consumer brands by leveraging technology along with brand-building activities,” said Rahul Shah, a partner at EvolutionX, in a statement.
“Mensa has proven its execution capabilities with the successful acquisition of multiple brands, and we look forward to supporting the company’s journey as it continues to grow its brands both in domestic and international markets.”
EvolutionX is a growth-stage debt financing platform established in 2021 by Temasek Holdings and DBS with initial funding of USD 500m. In addition to EvolutionX and Alteria, Mensa has received debt financing from InnoVen Capital, Stride Ventures, and TradeCred. Its other equity backers include Accel Partners and GableHorn Investments.
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