Roots Ventures bets big on niche consumer start-ups, to invest Rs 100 crore

BENGALURU: While sectors like health and e-commerce have seen significant investments during the pandemic, venture capitalists (VCs) are now looking for portfolios in alternative verticals with consumer awareness as a prime concern. 

Similarly, Roots Ventures has recently raised Rs 200 crore and has announced an initial investment of Rs 100 crore. 

Co-founder Ravinder Vashist, tells The Sunday Standard, that the fund closed 10 deals and is now keen on funding companies in the EV, clean air, energy savings and agriculture sectors.

Some of the portfolio companies of Roots Ventures include ayurvedic beauty brand Just Herbs, luxury premium products discovery platform Smytten, among others. 

What are the “unconventional sectors” which Roots Ventures is focussing on? 

We don’t suffer from FOMO (fear of missing out) of investing in “hot” sectors. Increasing consciousness towards the environment is percolating in mobility options like electric vehicles, clean air, energy savings etc.

Sustainable business models in these sectors are of interest to us. Agricultural reforms undertaken by the government recently are also expected to unleash the potential of the sector. We are now expecting a growing entrepreneurial activity in the harvesting and the entire post-harvest supply chain. 

Can you please tell us about the deals that were sealed during Covid-19? 

We have been investing post our first close and have completed 10 deals so far. We have invested across consumer tech, consumer brands and technology-enabled consumer ancillary businesses like logistics and remittances.

Almost two-third of our disbursed portfolio has seen up round within a year of our investment and 75 per cent of the portfolio is either at or above pre- Covid revenues. Funding activity is picking up... Is the worst behind us? 

​Investment activity has gone up... but are still subdued on a y-o-y basis. Reports suggest that August recorded VC/PE deals worth $1.9 bn compared to $4.3 bn in August 2019.