Pidilite Industries—a leading adhesive manufacturer in the country with brands such as Fevicol and Fevikwi—has been engaged with Indian startups for the last three years or so, through its corporate venture capital (VC) arm.
Pidilite Ventures, which was established in 2020, has cumulatively invested $35 million till now in 10 Indian startups—LivSpace, Homelane, Pepperfry, BuildNext, Aapka Painter, Imagimake, Onsite Teams, Finemake, Pace Robotics, and Kaarwan.
These startups are predominantly in the home segment providing products and services such as furniture, interior design, building construction, and painting. They also—directly or indirectly—consume the products and services of Pidilite Industries.
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Pidilite Ventures is now looking to expand its scope of engagement with the startup community in a bid to drive the innovation agenda of the company.
Sanket Parekh, Director, Pidilite Ventures, talks to YourStory on why the company likes to stick close to startups and its association with the startup community through a separate VC arm.
“This is a good vehicle to access innovation in the startup ecosystem and focus on areas where we are traditionally involved,” says Parekh.
The key participants in the Indian startup ecosystem are founders/entrepreneurs and the venture capitalists backing them. Besides them, there are also technology companies, industry bodies, accelerators, and incubators who contribute to the growth of the ecosystem.
However, the participation of corporates, especially those from the non-technology sectors, has been low—barring a few corporate VC ventures, such as Unilever Ventures, Sharrp Ventures from Marico Industries, and Pidilite Ventures.
What’s driving Pidilite’s bond with startups? Parekh singles out ‘innovation’.
Innovative practices have been the topmost agenda for Pidilite Industries over the decades, and partnerships with startups boost the innovation momentum, he elaborates.
Innovation agenda
While innovation has been happening in the technology sector for decades, industries in the non-technology space have adopted the digital-first approach only in the last seven to eight years, according to Parekh.
Traditional manufacturing has not seen the full impact of digital technologies, and startups can provide the much-needed impetus on this front, he says.
It is here that Pidilite Ventures wants to make a difference and tap into the innovation ecosystem of Indian startups.
Citing an example, Parekh points out how furniture manufacturing was once a largely on-premise activity wherein the entire work was done at the client’s site. But now, it has increasingly shifted to a more hybrid environment—with the entry of startups—wherein the majority of the work gets done at an offsite location.
Pidilite wants to seize the opportunity to engage with such startups focused on the home and furniture segment and see how both of them can collaborate in a mutually beneficial manner.
Under such an engagement, startups get exposure to the best practices of the industry, while Pidilite stands to gain considerable knowledge on customer preferences and other trends.
“Partnering with startups gives us the ability to be a little bit closer to the frontline (customers),” says Parekh.
Pidilite Ventures looks at its engagement with the Indian startup ecosystem as a constant learning curve, which helps it keep abreast of the latest innovations and get a closer understanding of how to better deploy technology tools, given that most startups are primarily digital platforms.
“By investing in these companies, we are starting to learn about the best technology suites and how we should be thinking about it,” says Parekh.
Investment philosophy
Pidilite Ventures has partnered with 100x.VC, a very early-stage venture capital firm, in its endeavour to support startups. Under this partnership, the VC firm provides the investment framework while the decision-making rests with Pidilite.
Unlike other corporate venture capital entities, Pidilite Ventures has not set aside any funding amount for the investment purpose and draws upon the balance sheet of the parent company to put money into any startup.
According to Parekh, this helps the company don the role of a patient capital investor in startups as it is not under any pressure to get a certain return on the money invested within a particular time-frame. It also gives the company the freedom to invest at any stage of the startup—be it early or late.
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There is also a strategic intent behind Pidilite’s investment philosophy.
Pidilite Ventures provides pragmatic inputs, drawing on its industry background, and also nudges the startups towards the path to profitability, sooner than later. This helps startups be more judicious in their spending and work towards building a sustainable business model.
Pidilite Industries reported a revenue of Rs 11,752 crore for 2022-23 fiscal year, at a growth of 19% year on year, while net profit rose 7% to Rs 1,289 crore. Among its portfolio, home interior and renovation company LivSpace has bagged unicorn valuation, while Pepperfry, an online marketplace for furniture and home décor, and HomeLane, a home interiors platform, are in the ‘soonicorn’ category.
Pidilite Ventures aims to bolster its engagement with the Indian startup ecosystem with initiatives such as conferences and building networks to enable more innovative ventures to come up in the space the parent company has a presence in.
While the Indian startup ecosystem is dominated by segments such as ecommerce, fintech, edtech, and mobility, very few companies are present in the industrial segment, in which Pidilite Industries operates.
Pidilite Industries is a manufacturer of adhesives, industrial products, construction chemicals, and art material.
Pidilite Ventures is eager to support and nurture more innovations from Indian startups in the manufacturing and industrial segment—not just with capital but also help them reach a large number of customers.
“Our mission is to catalyse this ecosystem and make our presence known, so that founders are also thinking about this (industrial) space,” says Parekh.
Edited by Swetha Kannan
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