When Verlinvest, a Belgium-based family investment firm, first backed Sula Vineyards in 2010, few had heard of the winemaker. Sula is today the default choice for wines in India and close to a $100-million company with a 70 per cent market share. Verlinvest is a large shareholder.
In 2011, Verlinvest was an early-stage investor in Kishore Biyani’s Future Ventures (now Future Consumer & Future Lifestyle) and Future Retail. Today, Future Consumer is valued at $1.7 billion, Future Retail at $3.8 billion, and Future Lifestyle at $1 billion after a series of demergers.
The investment firm of the founding families of AB InBev, the largest brewer with brands like Budweiser and Castle Lager, has sewed up a consumer portfolio in India that includes businesses like Sula (2010), Future Ventures, Future Retail, Blu Blue Foods/ Pan India Foods (2011), F&B Asia which has Burger King, Massive, Pind Balluchi, Harry’s (2012), Epigamia (2016), Veeba Food (2016), Xseed (2016), and Byju’s (2017).
We’re happy to stay in a company for a long period and deploy capital over multiple rounds: Nicholas Cator, Executive director & head of Asia, Verlinvest
The firm also invested in fashion e-tailer Jabong as part of its 2013 investment in the Rocket Internet-backed Global Fashion Group. Verlinvest has exited Future Retail, Future Lifestyle and Jabong. Last month, it helped Veeba raise $6 million with other co-investors.
‘‘India is a key growth market for us and we have been active since 2010. India is the biggest country within our Asian portfolio with great prospects as premium consumer brands are likely to gain share in the years to come,” says Arjun Anand, investment associate at Verlinvest.
Verlinvest is best known for backing brands like Glaceau Smartwater, which it grew from $5 million to $500 million in sales in five years before selling it to Coca-Cola for $4.2 billion and coconut water Vita Coco, which is popular in the US and Europe.
The firm was started two decades ago when the founders of InBev wanted to diversify their risks. As they understood brands, they decided to back only consumer businesses globally. Verlinvest has $1.8 billion in assets, with a third of them in Asia in markets like India and China.
In India, the Belgian firm initially started as an investor in funds, also called limited partners. It has invested in Everstone Capital’s $540 million second fund in 2010 and was an anchor investor in DSG Consumer Partners’ $50-million second fund in 2016. Everstone also bought a 50 per cent stake in DSG Consumer Partners last year.
Verlinvest has co-invested with these local investors in several deals, including Sula, Veeba and F&B Asia. Verlinvest came in contact with Deepak Shahdapuri when it invested in Sula. When he set up DSG Consumer Partners in 2012, Verlinvest co-invested with him in yogurt and ice cream maker Drums Food and condiments maker Veeba Food.
India is the biggest country in our Asian portfolio; premium brands will gain share here: Arjun Anand, Investment associate, Verlinvest
Verlinvest typically targets growth-stage deals. But partnering with DSG allowed the family office exposure to early-stage deals in the consumer space. It invests $15 million in a company initially and $50 million over the next three-four years. When companies raise subsequent rounds, it can increase its stake gradually and become more active.
In China, it has a similar strategy and backed two funds raised by consumer-focused private equity firm ClearVue Partners. Its first co-investment with the GP came in 2014 with a commitment to New Peak Group, which operates an online pharmacy known as 111.com.
After focusing on food and beverages, Verlinvest has added additional verticals in Asia. While New Peak is into health care, it has invested in Singapore K-12 education start-up Xseed and learning app Byju’s. It also teamed up with education specialist Brian Rogove to form ChangedEdu, an education platform which has acquired an asset in Vietnam.