Mensa : The next indian decacorn

In 6 months, the Mensa brand went from its inception to a unicorn, with 1500 Cr in annual revenue run rate. Mensa is a startup story that is unheard of in the Indian startup ecosystem.

The core idea of the mesa is simple, Mensa acquires or partners up with direct-to-consumer (D2C) brands and later revamps their entire processes and systems to unlock massive growth.

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In 6 months, Ananth Narayanan ( former CEO of Myntra and co-founder and CEO Medlife ) created a truly exceptional platform that understands the depts of D2C brands and global consumers.

The origin

Mensa brand has a star-studded founding team with Anand Narayan, former CEO of Myntra, leading the pack. Myntra and its acquisition by Flipkart is among the best tales in the Indian startup ecosystem.

Usually, a D2C brand scales to the point and later, its growth stagnates – growing beyond a particular point is challenging and capital intensive. As a standalone Indian brand, this is a herculean task, and there is where Mensa comes into the picture.

From its origin, Mensa has an ambitious goal of building the digital version of Unilever, more like a parent umbrella corp with hundreds or thousands of brands under its roof.

What are "Mensa-style" startups?

The core strategies deployed by Mensa are nothing new in fact Thrasio, a US-based upstart has been seen as the market leader for this category for a while; Thrasio has raised significant capital and acquired hundreds of brands so far.‍

In a nutshell, Mensa uses 3 key strategies.

1. Sourcing a high-performing brand - thousands of high-performing, high-margin E-commerce brands are out there. They are trying to build a profit-generating business while fine-tuning operations and creating a loyal customer base.
2. Exit for the funders - Mensa or similar firms either acquire the brands outright or provide the exit opportunities in the trenches ( Eg: 70 % on initial acquisition rest in compensation while working with Mensa. This exit opportunity is lucrative for entrepreneurs. This gives them significant financial gains and an option to share their operational responsibility with the new acquiree.
3. Optimization & Scaling - Mensa or the parent firm use their in-house capabilities and shared resources to scale up the acquired brand exponentially - this includes new technology integration, digital strategy and potential expansion to new geographies.

What Mensa look for in a brand

For acquisition, Mensa primarily looks for brands operating in the categories of fashion, beauty, home and apparel.

Mensa's filtering criteria are ranked in order.

1. Consumer love - Retention, LTV, Social media - essentially a whole outlook on how much consumers love brands' products.
2. Founder fit - Background, ambition, passion for building a household name
3. Financials- 10Cr-70Cr in revenue, Profitable brands - getting to growth by substituting capital is hard. Mensa love brands have already achieved profitability, Unit economics on products.

So what does Mensa do after acquiring a brand?

Mensa unlocks the scalability of its D2C brand through three fundamental principles.

1. Multiplatform optimization: The Indian consumer market differs from the west - no single dominant E-commerce platform exists here. Platforms like Ajio, Myntra, Amazon, Flipkart and Meesho have significant market share. A D2C brand can be extremely good at one platform and might not be performing well on others. After its acquisition, Mensa optimizes its product line and internal processes to ensure they rank well on every major platform.
2. Streamlines operations: Having multiple brands under the same house helps for a better and more efficient resource allocation -  Eg: warehousing and operations insights.
3. Tech play: Menso refines the new brand’s tech stake and positions its digital strategy for scale while streamlining the consumer experience and streamlining marketing strategy.

The competitive landscape

The initial success of Thrasio's has led to the origin of a few other players in the Indian consumer space.

Few of them being

1. GlobalBees: Raised Series B from investors including Lightspeed, SoftBank and FirstCry [ December 2021 ]
2. 10Club: Raised $30 million in an equal mix of debt and equity led by Olive Tree Capital. Other investors, including  Fireside Ventures, Secocha Ventures and Boat co-founder Aman Gupta [ Jun 2021 ]
3. GOAT Brand Labs: Raised a $50 million mix of debt and equity funding. Investors including Flipkart Ventures and Tiger Global.[ June 2022 ]
   

Menso and its major competitors were able to raise record capital in its relatively early stage of growth – this capital inflow shows the tremendous  VC love for this space - they expect next-generation Thrasio from India.

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The future

New brand creations are expensive - from technology to establishing operations and logistic networks take significant time and capital. The emergence of tech-driven players like Myntra, Flipkart and logistic upstarts like Delhivery has changed that drastically.

This macro trend of the Indian consumer's space has seen substantial growth, which will immensely help to accelerate the growth of new Indian D2C brands and rollups like Mensa.

Indian brands have a fantastic opportunity to go global - this can potentially bring unprecedented scale both in terms of audience and revenue, but this will require capital and the right expertise.

Within the first ten months, Mensa acquired 10 brands from India and the global market. Shortly, they are planning an acquisition portfolio of 50 brands under their wing.

With an exceptionally strong team and ample capital Mensa seems unstoppable right now.

I'm excited to see the global scalability of Mensa's core model :)