Reboot: Ananth Narayanan’s gameplan for spending his $50 million Series A cheque

Reboot: Ananth Narayanan’s gameplan for spending his $50 million Series A cheque
Ananth Narayanan, Founder and CEO of Mensa Brands
31 May, 2021

For Ananth Narayanan, Mensa Brands, his newest career move, is somewhat familiar ground. He’s going back to building consumer brands, something he did for about four years at Flipkart-owned Myntra. 

Mensa denotes ‘constellation’ in the ancient Greek language and as the name suggests, the startup aims to build a cluster of brands by consolidating third-party ecommerce sellers and scaling them. 

Mensa marks Narayanan’s first outing as an independent entrepreneur. He started his career at management consulting McKinsey & Company where he worked for 15 years across four offices -- Chicago, Shanghai, Taipei and Chennai. He supervised strategy and operations for its clients and product development practice in Asia. In 2015, he joined fashion ecommerce platform Myntra, taking over as CEO from co-founder Mukesh Bansal.  

After a near four-year stint, he moved to Medlife in August 2019 as a co-founder and CEO. His jobs was to drive growth, strengthen the team and lead mergers and acquisitions at the Bengaluru based health-tech platform. He was also part of Medlife’s board of directors. When Medlife was acquired by rival PharmEasy early this year, Narayanan decided to look for new opportunities and that turned out to entrepreneurship. 

At Mensa Brands, Narayanan has set up a core team with a combined experience of over 60 years in ecommerce and technology and he’s kicked off with a bang.  

On Monday, the fledgling startup raised a massive Series A funding round from a posse of blue-chip investors. Accel India and Norwest Venture Partners, both with marquee Silicon Valley venture capital firms, teamed up with alternative investments firm Falcon Edge Capital to lead a $50 million Series A funding round into the startup.  

It doesn’t stop there. Narayanan has also roped in some heavyweights as angel investors in the round. There’s Cred founder Kunal Shah, Curefit founder and former boss Mukesh Bansal, DST Global managing partner Rahul Mehta and Tiger Global Management partner Scott Shleifer. 

Plus, the debt component of the round has been financed by two of India’s largest venture debt firms -- Alteria Capital and InnoVen Capital, who have come together as co-investors in a rare instance. 

So, what’s Mensa Brands’ big play? 

It’s quite simple, really. Narayanan is loosely attempting to replicate the Thrasio model in India.  

Walpole, Massachusetts based Thrasio, backed by Oaktree, Advent and Peak6, among others, is part of an emerging breed of ecommerce companies such as Perch, based in Boston, and Berlin based SellerX, which specialise in acquiring and scaling Amazon FBA – fulfilled by Amazon – businesses that are already popular on the ecommerce giant’s marketplace. It has acquired and consolidated more than 100 brands and is currently valued at more than $1 billion. 

Narayanan wants to build Mensa into house of digital-first brands that leverage technology capabilities to scale them in India and abroad.  

“We want to acquire about 50 brands over the next three years. These brands will be primarily digital-first brands where at least 70% of their revenue comes from online,” he told TechCircle.


The startup will acquire profitable brands within a revenue bracket of Rs 10 crore and Rs 70 crore across five categories that offer high gross margins -- home, garden, apparel, personal care and beauty. It aims to acquire a majority stake in a brand, give the founder a financial exit upfront, and gain complete ownership in 2-4 years.  

“We would value brands between 4X and 5X of EBITDA... if the EBITDA is X, we want to invest 4-6x of that,” he said. 

Like Thrasio, the primary growth arena for the brands would be online marketplaces, such as Amazon and Flipkart, and direct-to-consumer (D2C) channels. It wants to apply technology and product capabilities as a long-term differentiator. Narayanan claims it will introduce a scientific pricing and discounting model.  and is building APIs for each marketplace to help brands spend their digital marketing money better and in a data-led fashion.  

It is also working on a slew of products including scrapping tools, data analytics tools, and a system to track reviews and ratings automatically. Narayanan said the technology tools would enable the platform to identify best brands to go after. Once acquired, it would apply demand, pricing and inventory management to help them scale. Mensa wants to productize every line involving the P&L of the brand, which is the only way to effectively manage multiple brands. 

The platform will also ook to scale its portfolio brands globally. “Depending on the categories we are looking at, we are pushing very hard to see if we can take some of these brands global. We will look at the leading marketplaces in global markets -- such as Namshi or Amazon in Middle East, Zalora in Southeast Asia or Amazon in the US,” he added. 

According to Narayan, the market is very deep in India itself and being in India offers a real opportunity to go global. He said there are currently over 4,000 brands across the marketplaces, removing overlaps and national brands, in the Rs 10-70 crore revenue bracket, of which it aims to acquire 50 in the next three years.  

“The base rate of ecommerce growth is 35-40% year-on-year. If you can acquire these brands and operate them better and double their growth rate, you are talking about 60% year-on-year ecommerce growth,” he said.