D2C firms raise US$ 543 million in FY22

The valuation of funds raised by D2C firms this financial year (FY), is more than the combined sum of FY19 and FY20

April 8, 2022

During FY22, more than two direct-to-consumer (D2C) companies raised funds on average per week, despite the number of new entrants halving

The recent increase in online shopping trends has helped the D2C ecosystem turn into a market disruptor

In 2021, only 5% of the 600 D2C enterprises achieved a revenue of INR 100 crore

Well-funded D2C companies will have an advantage over mainstream FMCG (fast-moving consumer goods) companies as they do not have the same pressures on profitability

D2C enterprises raised a total of US $543 million during the current financial year, according to the latest estimates from Tracxn, a market intelligence research firm. This amount is more than the money raised in the last two financial years combined. With customers’ shopping habits shifting to online platforms, D2C brands have disrupted the market. 

During FY22, more than two D2C companies raised funds on average per week, though the overall size of newer players in the space is halving. In 2019-20 and 2020-21, around 500 companies entered the market. 

In 2021, only 5% of the 600 D2C enterprises have achieved a revenue of INR 100 crore (US$ 13.1 million), while 20% of them had revenues in the range of INR 20 crore (US$ 0.26 million) to INR 90 crore (US$ 11.8 million). The rest had revenues of less than INR 20 crore. 

As per market experts, having surplus revenue will become very important as acquisition costs increase. This might prove as a challenge for new entrants to the market. However, well-funded D2C companies will have an advantage over mainstream FMCG companies as they do not have the same pressures about profitability.

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