MUMBAI: Global private equity firm Verlinvest is sharpening its focus on India, expanding deal sizes and moving further down the capital stack as it concentrates more of its Asia strategy on the country and doubles down on consumer-facing businesses in its fastest-growing market.
The shift reflects a broader reallocation of attention within the firm, which has gradually concentrated its emerging-market strategy on India after earlier operating out of Southeast Asia. That said, it continues to maintain a smaller footprint in China and Indonesia.
“Over the last 2-3 years, we must have invested about $200-300 million across our growth and venture arm in the country and we continue to selectively look at larger transactions,” its global CEO Roberto Italia told Mint in an interview.
“A few years ago, we were going after the Southeast Asia opportunity and were operating out of Singapore and Hong Kong. Over time, it became pretty apparent that India would offer a number of attractive features that would be relevant for us in the long term,” Italia said.
“We decided to concentrate away from Southeast Asia and focus almost 100% of our efforts in India, setting up our physical presence in Mumbai. That choice proved to be right as the direction of the economy here irrespective of the ups and downs has moved at the right pace and yielded us returns,” he noted.
The 100% shift came a year after Italia joined the firm in 2020. Beyond Mumbai and Brussels, Verlinvest also has offices in Singapore, London and New York.
Founded by the family shareholders of AB InBev, Verlinvest manages about €2 billion in assets globally and focuses exclusively on consumer brands across food and beverages, beauty, personal care, retail, digitally native brands and consumer healthcare services.
In India, its typical cheque size ranges from $20 million to $100 million, with a sweet spot of about $40 million that has been rising closer to $60 million in recent years.
It has backed startups including Blue Tokai Coffee Roasters, Epigamia, Lahori Zeera, Heads Up For Tails, Ferty9 and The Eye Foundation, alongside earlier bets such as Capital Foods and Future Retail, both of which it exited.
It entered India over 15 years ago with its first investment in Sula Vineyards in 2010.
Full-stack consumer platform
The firm’s India strategy has evolved from growth-stage investing into a broader capital platform spanning early and later-stage companies.
“About 3-4 years ago, we decided that we want to master the cycle of capital provision to consumer-facing companies. So, we stretched ourselves a bit and have grown in terms of size and are writing larger cheques. By the same token, we decided to set up our own country-focused capital business in India that would enable us to capture opportunities at a very early stage of development through our venture arm–V3 Ventures,” Italia explained.
That venture arm, V3 Ventures, invests in pre-seed to Series A companies and has backed startups such as Superyou, The Hosteller, Ugaoo, Deconstruct and Dil Foods.
The growth and venture strategies are increasingly integrated, with Verlinvest positioning itself as a lifecycle capital provider for consumer businesses.
These companies, Italia said, benefit from operational and strategic support beyond capital, including systems building, product calibration and omnichannel execution.
“We extensively look at metrics such as growth rate and the LTV to CAC ratio that measures the long-term profit a customer generates compared to the cost of acquiring them. We also really scrutinize the model through which the company generates value from an individual customer and then distil that into how capital gets applied,” he said.
Verlinvest’s conviction in India is anchored in demographics and consumption potential, even as it acknowledges current income constraints.
For comparison, the age groups of 2-10 years old in the West are around 7-8% of the total population and the same figure in India constitutes about 26-27%. “That puts into perspective the consumer spending power you are investing behind. While the spending power may not be very strong currently, volume-wise—it is almost difficult to measure relative to the average western capital provider.”
The demographic profile offers a long runway for consumption growth, particularly in categories such as food, personal care, healthcare and retail.
Caution and exits
Despite continued deployment, Verlinvest does not expect significant exit activity in the near term, citing volatile markets and tightening liquidity conditions.
“The markets are heavily affected by external events and there is also an AI-led frenzy making liquidity scarcer. So, I don’t expect high-quality exits to occur in the course of this year as the environment has not been very conducive. That said, the circumstances may also change very fast,” he said.
Italia also flagged currency depreciation as a structural concern for global investors in India, arguing that sustained rupee weakness could erode returns and consumer purchasing power.
“It cannot be an environment that sees its currency fall by 15% year over year. That I believe requires a more serious approach from the administration as the loss of value of the rupee leads to rising input costs, creates inflationary pressures that translate to lesser spending power. This makes it difficult for companies to manage over a prolonged period of time,” he said.
