Indian billionaire Mensa Brands is already profitable, says founder

Indian start-up Mensa Brands has catapulted itself to billion dollar unicorn status in just six months and, in a more rarefied feat, is already profitable, its founder told CNBC.

The direct-to-consumer brand aggregator this week became the fastest company in Indian history to reach the coveted threshold after closing its $ 135 million Series B round of funding at a valuation of $ 1 billion.

The financing, led by Falcon Edge Capital, brings the total funds raised in the form of debt and equity to $ 300 million.

“In the first six months of operation we are really profitable and we continue to intend to run this business profitably,” founder Ananth Narayanan told CNBC’s “Street Signs Asia” Thursday.

Growing digitally driven brands

Mensa Brands operates by acquiring digital brands and developing them nationally and internationally. It is currently home to 12 brands in three key categories: fashion, home and beauty and personal care.

“We’ve actually had a lot of success with acceleration of brands, which is really why I think the company is valued by what it is valued,” Narayanan said.

The key, said Narayanan, who was previously CEO of Indian fashion e-commerce company Myntra, has been to identify profitable brands with quality founders, loyal customers and between $ 1 million and $ 10 million in annual revenue. .

Ananth Narayanan, founder of Indian brand aggregator Mensa Brands.

Mint | Time of Hindustan | Getty Images

“Over the past six months, through technology, product, digital marketing, we’ve been able to grow our brands north of 100% year over year, and I think that’s been the key, ”he added. .

Over the next 12 months, Narayanan said the company plans to double its existing verticals, partnering with 30 other brands.

“These markets are very deep… [they’re] north of $ 120 billion in offline and online revenue, “Narayanan said.” This concentration helps us build brands very differently, because we understand the space well, we understand the niches. “

IPO plans “on the road”

The rapid rise of Mensha Brands comes as the Indian start-up ecosystem flourishes with increased digital adoption and better access to private capital.

There are currently around 70 startups in India that meet the definition of a unicorn, according to Goldman Sachs estimates. More than a third of them said they hit the $ 1 billion valuation mark in 2021.

The digital payments platform Paytm, one of India’s original tech start-ups, went public on Thursday in an initial $ 2.5 billion public offering – the largest in the country. Its shares were down 24% on its first day of trading.

Narayanan of Mensa Brands said his company has no plans to tap public markets at this early stage. However, he said a public listing would likely be “on the way,” noting that the company has big ambitions for growth.

“Absolutely, later the answer is we would go public,” Narayanan said. “We are a house of brands. We want to create what I would say is a modern take on a Unilever or Inditex from the first digital brands. “

—Saheli Roy Choudhury of CNBC contributed to this report.

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