Mensa Brands: Startup with a Rocket Launch
Mensa Brands has become India’s fastest startup to be a Unicorn startup within 6 months by raising $135 million dollars in a new funding round led by Falcon Edge Capital. Founded by Ananth Narayanan, who was also cofounder of MedLife and chief executive of Myntra, has made Mensa Brands reach this milestone. Mensa Brands is a Thrasio model startup. Thrasio is a Boston based Unicorn that acquires private brands that are sold on Amazon with a FBA(Fulfillment by Amazon) label and then scaling them up overseas.
Mensa Brands works the same way by acquiring direct-to-consumer brands and eCommerce businesses. The organization will help these brands influence tools it has worked to develop their business on commercial centers, through their own sites, or even on global stages. A “House of Brands”, Mensa is interested in growing brands that deal with Home, Beauty, Apparel and other Personal care products, all those who have an average revenue of around 20–60 crores.( 3–4 million dollars).
How Mensa Build Their House Before Building others’
A Bengaluru based startup, founded in 2021, Mensa is backed by their investors such as Accel, Falcon Edge, Norwest, Bergwelt and GabelHorn Investment and Prosus Ventures as a new investor who, along with Falcon Edge, raised $135 million dollars in their Series B funding round. Mensa Brands is being led by one of the great entrepreneurs of India, Ananth Narayanan who is Founder at Mensa Brands. In May 2021, it raised $50 million dollars in the Series A funding round led by Norwest Venture Partners, Accel Partners and Falcon Edge Capital. In August, they had their second Series A funding round and raised $33 million dollars with their investors Alpha Wave Incubation and Norwest Venture Partners. They had their Debt Financing in May with their investors— Alteria Capital and InnoVen Capital.
About their second round of Investment (Series B), Ananth Narayanan said- “One of the key reasons to raise another round of investment this year is to invest in more brands. There are a lot more inbound deals coming our way, and we look to tap into those opportunities. Close to 80% of this fundraising will go in bringing these brands to Mensa’s fold. The second is to grow and scale our brands both in domestic and international markets, as well as to scale our team.”
Members of The Mensa’s House
“We partner with the brands though we are acquiring a majority. Over the next five years, based on certain metrics and milestones, we can decide on acquiring the rest of the stake. The reason we do it that way is so that the founders are aligned with us and get to create value,” Narayanan said about acquisition of the majority stake in consumer brands.
All Mensa’s partners offer a wide range of Home, Fashion and Beauty products. Mensa acquired Dennis Lingo, a brand based in Mumbai for men’s style and a leading market player in shirts.
Narayanan believes that these brands are growing at a tremendous rate and over the next few years, more and more D2C brands will generate $50 million dollars in revenue and the acquired brands are generating INR 30–40 crores already.
Mensa’s Future Aspects
It intends to procure 50 brands over the next few years and it’s rivals GlobalBees, GOAT Brand Labs, 10club, Powerhouse91, Upscalio and Evenflow, Mensa has now joined the race and is looking to outrun all of them.
The Future of D2C Ventures
Covid has affected every single business and has forced people to change their style of doing business or even the business itself. With the rise in the number of people using Internet everyday, online shopping industry had a major boost. It rocketed through the sky when Covid-19 disrupted everything. Brands were losing the trust they had with their customers because for any company, their customers are everything and continuous engagement with them is what builds the trust between the business and the customer.
Change in the consumer behavior prompted numerous brands to shift to the D2C model. Shifting to the D2C model became a silver lining to many Indian companies such as Bewakoof, mamaearth, SUGAR Cosmetics etc. Their sales increased many times as they could directly interact with consumers through their official websites or through their social media handles. But it is not a one way street.
So, let me summarize you the merits and demerits of the D2C model.
MERITS
- Direct interaction with their customers: It is not possible for brands to have a direct contact with their consumers if they are entirely dependent on wholesalers and retailers for their marketing and branding. D2C ventures have the opportunity to hear consumer’s feedback and directly interact with their customers through online medium.
- Trust between the company and the customer: Every consumer wants that their opinion about the product be heard. Companies with their social media handles and their official websites allows the customers to directly contact the brands and this builds trust between the two. Mensa Brands’ official website allows the small startups to contact with them if they want to be a member of the Mensa house.
- Cut down the risks: D2C brands have the advantage to have a better insight about their product through their consumers and according to people’s taste and opinions, they can easily know what changes to bring to their business and cut down the risks of losing their control in the market and hence keeping the trust with their customers alive.
Demerits
- Life changing decision: Entrepreneurs should think like a 100 times before shifting to D2C business. This is going to completely change their way of doing business including their product, marketing, branding, management etc. In countries like India, the ever changing dynamic business environment, it is a big business risk and decisions like these could either make you or break you. Small startups could not bear the loss if things go south.
- Switching costs are HUGE: Companies should carefully examine each and every aspect before switching to the D2C model as this is going to cost them huge amount of money. Training their employees who aren’t much aware of this style, their tie-ups with the retailers and wholesalers, and money to be spent on online marketing. Plus, every brand has to bear losses at some point after changing their course of business. You’d have to put a lot of sugar in order to have a sweet coffee or tea.
Companies need to understand their requirements and review their style of doing business, it’s profitability before switching, and a 1000 other aspects.
Mensa Brands started as a D2C venture, knew how the present Indian market works and how people will shift to online businesses and e-shopping in the next few years. Ananth Narayanan served as CEO of Myntra and Cofounder of MedLife which he merged as PharmEasy making it the biggest e-health brand in India. What I am trying to say is experience is everything. That is why Mensa achieved the Unicorn status in just 6 months and is ready to compete with it’s biggest competitors because experience gives you a sight of what sells and what will be sold in the future.
Work for the community, get to know the community and when you’re ready, create your commodity.
