Sauce.VC launches third VC fund with target corpus of Rs 250 crore

New Delhi-based consumer-focused venture capital firm Sauce VC has launched its third fund, targeting to raise Rs 250 crore. 

The firm, known for backing emerging consumer brands like Mokobara, The Whole Truth, and Supertails, aims to support 15-16 early-stage startups through this new fund. 

According to Manu Chandra, the founder and managing partner of Sauce VC, the Securities and Exchange Board of India (Sebi) gave clearance for this fund a few weeks ago.

D2C gaining traction among investors

The launch of the new fund comes at a time when the direct-to-consumer (D2C) space is gaining traction among risk capital investors, particularly those focused on technology.

Chandra highlighted the growing interest in the D2C sector, noting that brands are scaling up much faster due to advancements in last-mile infrastructure, tech stacks, and payment systems.

“When we started out in 2019, there was no quick commerce. Now all the last mile infrastructure, tech stack, payments stack, everything has been solved for consumer brands, and brands are becoming bigger much sooner,” he said.

How will the new fund be structured?

Sauce VC plans to raise the capital primarily from domestic limited partners and its existing investors, including family offices and corporate houses in the consumer sector.

Unlike previous strategies that involved raising continuity funds, Sauce VC will now focus on making larger investments directly from the main fund. “We want to remain consistent with this new fund in terms of stage, sector and size,” Chandra stated.

The firm’s new fund will issue cheques in the Rs 3.5-4 crore range, an increase from the Rs 2-2.5 crore deals made through earlier funds.

Investment philosophy

Sauce VC remains committed to the consumer sector, focusing on early-stage brands with high growth potential.

The firm has developed a robust ecosystem and a proven playbook to help brands grow from the ideation stage to a Rs 150-200 crore scale. 

“Sauce now has a very deep ecosystem and tested playbook to take brands from an idea stage to Rs 150-200 crore scale consistently. We took pre-revenue bets in Mokobara, Hocco Ice Creams, The Whole Truth and many others and hope to find many more exciting brands and founders to back at the ideation stage itself,” Chandra explained.