The recently concluded D2C Playbook track at TechSparks Delhi shed light on intriguing insights and valuable perspectives from funding experts. Moderated by Sowmya R, Senior Correspondent at YourStory, the panel discussion featured Shreyans Gangwal, Principal at Fireside Ventures; Rajit Uboweja, Principal at Stride Ventures; and Zoeb Ali Khan, Senior Associate at Sauce.vc.
Navigating change in the D2C space
The discussion began by acknowledging the transformative journey of the Direct-to-Consumer (D2C) space. Gangwal spoke about the evolution, recalling how D2C investments seven years ago focused on obvious white spaces. He highlighted the shift from simplistic strategies of customer acquisition to a more nuanced approach today, emphasising deep cohort-based content strategies and diversified marketplace strategies.
Khan highlighted the emergence of new channels like Quick Commerce, underscoring the growing significance of adapting to evolving consumer demands and preferences.
Uboweja offered a unique perspective from a venture debt fund, emphasising the shift in focus from growth to profitability. He stressed the need for businesses to aim for positive margins, covering costs effectively, and highlighted the significance of diversification in channels, suppliers, and geographical presence.
Do founders really need funding?
An intriguing aspect discussed was the necessity of funding for D2C founders. Gangwal urged founders to introspect deeply before seeking capital, emphasising the need to align personal and business aspirations with the requirement for funds.
“It’s important to raise at the right valuation, not high, not low, and to think about the lifespan rather than one particular valuation round,” Gangwal said.
Khan highlighted scenarios where strategic funding is crucial to combat competitive intensity. “Understanding the necessity of capital and aligning it with the long-term vision is crucial for founders seeking funding,” he said.
Uboweja delved into the role of debt capital, emphasising the specific use cases for leveraging debt financing, such as working capital needs and capital expenditures. “Valuation is not just about a number; it’s about how much value the business can create in the long run.”
Valuation considerations
The conversation took a turn toward valuation dynamics in the current market. Panellists highlighted the importance of not overpaying or undervaluing a business. Gangwal emphasised the significance of understanding the cost of dilution and advised founders to think long term, focusing on the company’s lifespan rather than isolated valuation rounds. Khan stressed the stability and understanding of consumer businesses in the public markets, urging caution in valuation expectations.
The panellists concluded by echoing the importance of rational valuations, outlining the risks of unreasonable expectations in raising funds.
