Venture capital firm GVFL Ltd (formerly Gujarat Venture Finance Ltd) has invested Rs 30 crore ($4.6 million) in Varmora Plastech Pvt Ltd (VPPL), a homeware manufacturer, the VC firm’s top executive told DEALSTREETASIA.
The investment has been done through GVFL’s Golden Gujarat growth Fund-I which invests in manufacturing and infrastructure sectors, said Arvind Modi, vice-president at GVFL.
The Fund was launched in 2013 and has already made seven investment besides Varmora Plastech. It is a SEBI registered seven-year close-ended sector-agnostic fund.
“VPPL will use the proceeds to further expand its product range and market reach,” said Bhavesh Varmora, chairman and director, Varmora Group.
The company sells its products under the brand Varmora through 75 distributors. It also uses retail and online channels to export its products outside India.
“Premium homeware is estimated to be around Rs 10,000 crore dominated by unorganized players. There is a shift towards organized players who have captured around Rs 2,000 crore of the homeware market, which is growing faster than the unorganized market. The premium homeware segment caters mainly to the urban middle class customer but is seeing increasing participation from semi-urban customers,” said Sanjay Randhar, MD, GVFL.
“Increased urbanisation and lifestyle changes are expanding the market for superior products which Varmora caters to,” he added.
Ahmedabad-based VPPL was incorporated in 2013 and is a part of the Varmora Group. Its product portfolio includes plastic containers, oil cans, dustbins, crates, pallets and storage tanks.
GVFL has raised eight venture capital funds to date which have invested in over 80 companies.
The VC firm marked the final close of the Golden Gujarat Growth Fund-I in 215 at Rs 426 crore. The investors in the fund include Government of Gujarat and Life Insurance Corporation of India who put in Rs 100 crore each and other investors like SIDBI invested Rs 50 crore, Bank of Baroda contributed Rs 25 crore, IFCI put in Rs 25 crore and SBI contributed Rs 25 crore.
Union Bank of India, Central Bank of India, Dena Bank, Bank of India, Syndicate Bank, SBH, SBM, SBT, NABARAD, GIC, Oriental Insurance, New India Assurance and United India Insurance are also the investors in the fund.
Last August, the VC firm had invested $7 million in online bus booking platform Travelyaari along with Bennett Coleman and Co. Ltd. GVFL was already an investor in the company and had earlier invested around six years ago.