Just a few years back, startups turning into unicorns was a BIG celebration for the entire ecosystem. Now, with 30+ unicorns added this year (well, I have lost count), it seems that's not enough of a flex.
Now, Mensa Brands has become a unicorn in record time - just 6 months! MIND = BLOWN? Not just yours, mine too. So, I did a bit of digging. Here's all that I understood about Mensa Brands, the industry it is in and what its future might look like.
Let's jump in! Here's how I plan to cover the topic:
Well, firstly Mensa Brands is not an "original" idea. That's the beauty of @buildd-ing companies - you don't need to be original, just time it well and execute brilliantly :).
It all started in 2018 with a US startup, Thrasio. The broad idea is as follows:
Since 2018, Thrasio has done this with 100+ brands already! What's more, last year Thrasio made a revenue of $500 million with a profit of $100 million. It is worth $6 billion. Yup, all in 3 years.
Simply put, "Thrasio-style" startups acquire high-growth, money-making online businesses and manage them under a single roof - i.e. aggregator of D2C (Direct-to-Consumers) brands.
The success of Thrasio's model led to a bunch of companies in India trying to copy the same model in India. And.....as is typically the case, VCs have gone absolutely gaga over them, with HUGE sums of money invested in them.
Here are just some of the investments they have made in them:
Of course, this doesn't include our fastest unicorn, Mensa (we'll talk about it soon).
Overall, I guess it is safe to say that VCs are VERY interested in this space.
Mensa follows the Thrasio model entirely - i.e. it acquires or buys majority stakes in digital brands and then in-house experts take over to build the brand.
To date, it has already acquired 12 brands. While we have already spoken about the Thrasio model, let's understand the exact process that Mensa has to do to be successful:
This entire process is typically completed within 8 weeks.
Of course, the 'real' work starts here - to bring their expertise across various parts of building a D2C brand and to scale the business rapidly.
So, Mensa Brands raised $135 million at a valuation of $1.2 billion. But, given that 30+ startups turned into a Unicorn this year, is this really a big deal? Well, let's just put this in context:
The quickest companies to become a Unicorn before Mensa Brands were Apna (jobs platform), Ola Electric, Udaan, Glance, and Paytm Mall ⇒ all in the time frame of ~ 2 years.
Mensa Brands did it in 6 months.
But, what makes Mensa Brands such an investor sweetheart:
Quite simple - to invest into more brands. Now, while the founder said they plan to acquire another 40 brands in the next 12-18 months, let's do some quick math:
So, to acquire 40 brands, keep watching this space - Mensa Brands is very likely to a similarly huge fundraise in the next 12-15 months :)
The beauty of the model is that by definition you are buying profitable companies that are generating cash. So, as a result, Mensa Brands should also make profits soon (which the founder claims is already the case). However, there are things to consider:
1. From a skillset perspective
2. From a market dynamics perspective:
Karthik is building Flexiple, a tech talent network, which has already crossed $3 million, entirely bootstrapped. He shares learnings from experiences - no BS.