The Indian start-up Mensa Brands has catapulted itself to the multi-billion dollar unicorn status in just six months and is already profitable in a rarer achievement, its founder told CNBC.
The direct-to-consumer brand aggregator was the fastest company in Indian history this week to hit coveted threshold after closing its $ 135 million Series B funding round with a valuation of $ 1 billion.
The funding, which was led by Falcon Edge Capital, totals $ 300 million in debt and equity.
“We are actually profitable within the first six months of operation and we intend to continue to run this business profitably,” founder Ananth Narayanan told CNBC’s Street Signs Asia on Thursday.
Growing digital first brands
Mensa Brands operates by acquiring digital first brands and scaling them up at home and abroad. It currently houses 12 brands across three main categories: fashion, household, and beauty and personal care.
“We’ve actually had a lot of success in accelerating the brands, so I think the business is rated as it is rated,” Narayanan said.
The key, said Narayanan, who previously served as CEO of Indian fashion e-commerce company Myntra, was to identify profitable brands with quality founders, loyal customers and annual sales between $ 1 million and $ 10 million.
Ananth Narayanan, founder of the Indian brand aggregator Mensa Brands.
Mint | Hindustan times | Getty Images
“In the past six months, through technology, product and digital marketing, we’ve been able to have our brands grow 100% year over year, and I think that was key,” he added.
Within the next 12 months, the company plans to double its existing industries and partner with 30 more brands, according to Narayanan.
“These markets are very deep … [they’re] more than $ 120 billion in offline and online sales, “said Narayanan.
IPO plans “on the way”
The rapid rise of Mensha Brands is due to the fact that India’s start-up ecosystem is thriving amid a surge in digital adoption and better access to private capital.
According to Goldman Sachs estimates, there are currently around 70 start-ups in India that fit the definition of a unicorn. More than a third of them said they’d hit the $ 1 billion valuation mark in 2021.
One of India’s original tech startups, Paytm digital payments platform went public on Thursday with a $ 2.5 billion initial public offering – the country’s largest ever. The stocks lost 24% on their first day of trading.
Narayanan of Mensa Brands said his company had no plans to enter public markets at this early stage. However, he said a listing is likely “on the way,” noting that the company has big growth ambitions.
“In any case, the answer is that we would go public,” said Narayanan. “We are a house of brands. We want to create a modern version of a Unilever or an Inditex of digital first-name brands, I would say.”
– CNBC’s Saheli Roy Choudhury contributed to this report.