A wave of private equity interest is sweeping through India’s regional consumer brands, with companies like Iscon Balaji, Dermabay, and Country Delight drawing significant funding as larger FMCG giants grapple with sluggish urban demand. Investors are snapping up minority stakes in these nimble, smaller players, betting on their growth potential in a market increasingly driven by e-commerce and quick commerce, industry executives told The Economic Times.
About a dozen regional brands, including Ahmedabad-based frozen food maker Iscon Balaji, Ludhiana’s skincare startup Dermabay, Raipur’s Zoff Spices, and Karnataka’s Bindu Jeera, are either raising funds or attracting investor interest. Recent deals highlight the trend: palm oil-free snacking brand Khari Foods and Gurugram’s dessert chain FES Café each secured ₹3 crore in seed funding, while Chandigarh’s Lahori Zeera and dairy brand Country Delight raised over ₹200 crore each. CosMoss, a sea moss-based supplement maker, also closed an undisclosed seed round.
“We plan to raise ₹5-7 crore over the next two quarters from angel investors and family offices to scale our presence and accelerate innovation,” said Divneet Kaur, co-founder of Dermabay, a clinically-focused skincare brand launched in late 2022. Similarly, Ceres Foods, behind the Moi Soi range of noodles and condiments, is targeting ₹30 crore in its first institutional round to grow into a ₹500-crore brand within three years, according to director Deb Mukherjee.
The surge in investor enthusiasm stems from shifting consumer trends and structural advantages. “We thought premium was about affluent metros, but it’s very much visible in smaller towns,” said Kannan Sitaram, co-founder of Fireside Ventures, which has backed Jaipur-based dairy firm Frubon and Chennai’s Sweet Karam Coffee. “Quick commerce and e-commerce have reduced the advantage of legacy brands on distribution.”
Industry data underscores the shift. Grant Thornton Bharat’s June quarter Consumer & Retail Dealtracker reported a 26% year-on-year rise in deal volumes, with 120 deals worth $884 million, though deal values hit a low since Q4 2022, reflecting a focus on smaller-ticket transactions. This comes as larger FMCG players like Hindustan Unilever and Nestlé face challenges in urban markets. “Smaller companies are becoming more noticeable than the big giants,” said Nestlé India’s outgoing managing director, Suresh Narayanan, noting their role in broadening consumption and keeping legacy firms competitive.
Regional brands are also leveraging strong local identities. Puttur-based SG Corporates, maker of Bindu Fizz Jeera Masala, plans a ₹1,000-crore IPO for its House of Bindu, while Archian Foods’ Lahori Zeera raised ₹200 crore from Motilal Oswal Wealth, valuing the company at ₹2,800 crore. These deals signal a broader trend of investors backing brands with regional roots and global potential, fueled by India’s evolving consumer market.