Why we invested in Nestasia?
The Home & Living market in India is seeing remarkable growth, driven by evolving consumer preferences, increasing disposable incomes, a rising interest in premium products that enhance home aesthetics of living spaces, and the convenience of e-commerce. The COVID-19 pandemic, which led to more time spent at home, has further accelerated this expansion. In 2023, the Indian home and living market was valued at $21 billion and is projected to reach $30 billion by 2026.
Nestasia is an Indian brand specializing in home decor and lifestyle products, offering a premium range designed to enhance both the style and functionality of living spaces. It primarily targets shoppers aged 25-45 who seek trendy, stylish, and high-quality items, distinguishing itself from mass-market or unbranded products by up to 25% in price. The brand’s diverse product range includes kitchen and dining essentials, soft furnishings, bath sets, decorative accents, tableware, serve ware, home textiles, storage solutions, and seasonal decor.
NestAsia employs a demand-driven product development strategy with a strong emphasis on data. The company consistently conducts trend analysis for both international and domestic markets, gathers consumer insights and feedback, and performs in-house data analysis to expand its product categories. Through this approach, NestAsia is developing a fast-fashion like model for the home and living sector, launching approximately 500 SKUs each quarter, with around 10% of these becoming standout products. Nestasia’s products are known for their contemporary design aesthetic, which may include elements of modern minimalism, eclectic charm, or bohemian flair. The brand focuses on offering products that are both on-trend and timeless, catering to a wide range of consumer tastes and preferences.
Over time, Nestasia has built a broad network of meticulously chosen skilled artisans and manufacturers across Asia, ensuring that its products are of high quality, durable, and exquisitely crafted. By working closely with these curated suppliers, Nestasia is able to offer unique designs and fresh innovations to consumers, providing superior value and faster turnaround times for its products.
Nestasia is strategically positioned to leverage the macroeconomic trends shaping India’s Home & Living market. The brand’s strong online presence and extensive product range set it apart in a competitive environment and facilitate accelerated growth as e-commerce penetration increases. From decorative accents and tableware to home textiles and storage solutions, Nestasia offers a blend of functionality and style that meets modern consumers’ needs for both aesthetic and practical home décor. This approach allows the company to capitalize on shifting consumer preferences and the growing trend towards minimalism, evident in everything from logos to interior design. Nestasia’s emphasis on high-quality products at competitive prices, exceptional customer service, and sustainability is central to its value proposition. By delivering premium home decor that resonates with evolving tastes and expectations, Nestasia addresses a significant market gap, embracing the premiumization trend and the rapid growth in branded market share.
At Susquehanna Asia Venture Capital, we are enthusiastic about the direct-to-consumer (D2C) sector and its transformative potential. When we met the founders: Aditi Murarka & Anurag Agrawal, we were impressed by their vision and the complementary skill sets they bring, which enable them to excel in their respective areas of expertise. We also admire the company’s ability to execute effectively with minimal capital expenditure, demonstrating both efficient capital use and scalability. Nestasia’s achievements highlight the D2C sector’s viability and dynamism, attracting substantial investment and driving industry disruption. The company’s ambitious plans for rapid offline store expansion reflect its goal of becoming a leading name in home decor and lifestyle. With the ongoing growth of the online homeware market and increasing consumer spending on home decor, Nestasia is well-positioned for sustained success.
Our investment in Nestasia aligns with our objective of backing emerging D2C brands that are revolutionizing traditional markets with innovative products. Beyond homewares, we see numerous other categories where new brands can address shifting consumer tastes and preferences. We seek entrepreneurs who are challenging established brands and demonstrating efficient capital utilization. This is reflected in factors such as high gross margins, strong Return on Ad Spend (RoAS) or Lifetime Value to Customer Acquisition Cost (LTV/CAC) ratios, and minimal working capital cycles.
This brings our India portfolio to 20 (details here), and NestAsia joins our other consumer brands in the India portfolio (Wakefit & Rapidbox). If you’d like to share feedback on our thoughts above or if you’re building in the consumer brands space or enablers, please write to Abhilash Karri at abhilash.karri@sig.com – we’d love to share our learnings and help out along the journey.