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Investment activity to surge, valuations rationalising in consumer sector: Gemba Capital

Economic Times · 9d

Gemba Capital, a micro VC firm, predicts that investment activity in pure-play consumer tech startups will increase. The decline in investment seen in recent years is expected to be reversed, with venture capitalists actively seeking to invest in these startups. Despite a rationalization of valuations and stricter evaluation criteria, quality founders with solid business models are still attracting capital. Sectors such as gaming, digital entertainment, consumer fintech, and proptech are experiencing increased investment activity. Factors like growth, scalability, profitability, and customer acquisition costs are key considerations for investors. The gaming market in India is projected to grow significantly, with a shift towards digital subscriptions and micro-transactions. VCs are expected to focus on core themes like premiumisation, aspirational middle class, and digital penetration in rural India. Overall, the criteria for evaluating investment opportunities has become more stringent, and founders need to demonstrate product-market fit early on to attract investor interest.