Outgoing Puma India MD Abhishek Ganguly raises Rs 430 crore for his startup

The fund infusion comes at a time when investors are tightening their purse strings and funds flow into Indian startups has fallen at a record low in 2023, falling over 80 percent quarter on quarter in Q1CY23.

Former Puma India and Southeast Asia Managing Director, Abhishek Ganguly, along with co-founders, Atul Bajaj and Amit Prabhu, both of whom were also working with the German sporting company, have together raised Rs 430 crore (around $53 million) for their sportswear and athleisure startup, Agilitas Sports, Ganguly told Moneycontrol.

Convergent Finance LLP, an investment management and advisory partnership led by Harsha Raghavan, has invested Rs 400 crore in Agilitas while the remaining Rs 30 crore came from individual investors, whose names Ganguly did not reveal.

The fundraise comes days after Puma announced 0n May 11 that Ganguly will be leaving the company to start his own venture. Bajaj and Prabhu have worked with Ganguly for nearly 15 years. While Bajaj is the outgoing executive director and head of sales and operations at Puma India, Prabhu is the outgoing Chief Financial Officer at the sporting company.

During the interaction, Ganguly said he had “multiple inbound interests” from the investor community for his company, thanks to the network, connections and conversations he had during his time at Puma, but chose Convergent for their speed of action and their long-term investment horizon.

It is important to note that the fresh fundraising comes at a time when investors are tightening their purse strings and funds flow into Indian startups has been at a record low.

That was especially required when Agilitas will be a very capital-intensive business, as it requires manufacturing facilities, will need offline stores, along with investment in tech, too. The company plans to scale up quickly and is already in talks to acquire a couple of brands.

“The entry barriers in this category are quite high for a small player, it is very difficult to scale. And that’s why we have raised a large round right at the beginning. Because we also want to build for scale quite quickly and deploy the capital quickly,” Ganguly told Moneycontrol.

Some of the fresh capital will also go towards leveraging the Metaverse.

Agilitas aims to create an end-to-end chain of all things related to sports, from manufacturing to retail and what it cannot build in-house, it will acquire companies that have expertise in the field.

The startup will not exactly be like a roll-up e-commerce player, instead will look at three-four companies that complement each other’s offerings.

“(They are a team of) exceptional professionals and have an outstanding track record of building a sports and athleisure-focused business from scratch to become India’s largest. Their strong leadership capabilities are complemented by their skill in identifying consumer trends early…we believe that Agilitas represents the next step in the evolution of India’s consumer story,” Raghavan, Managing Partner at Convergent Finance LLP, said.

The size of the sportswear market was Rs 5,200 crore and was expected to increase 5X to Rs 5,600 crore by 2030, according to the draft red herring prospectus (DRHP) of Campus Activewear, a renowned player in the space, underscoring the growth potential.

The run at Puma

Prior to setting up Agilitas Sports, Ganguly used to spearhead Puma’s operations in India and Southeast Asia. He had spent nearly 18 years at the German multinational which helped him put Puma in a strong position against its rivals.

Puma India’s income rose from Rs 2,044 crore in FY21 to Rs 2,980 crore in FY22, as per the filings with the Registrar of Companies (ROC). Footwear accounted for 60 percent of the company’s total sales income in the fiscal, with apparel accounting for 35 percent and accessories for the remaining 5 percent.

In contrast, rivals like Adidas, Nike, and Reebok reported revenues of Rs 1,551 crore, Rs 814 crore, and Rs 417 crore, respectively, in FY22, and Rs 945 crore, Rs 564 crore, and Rs 320 crore in FY21. Essentially meaning Puma’s revenues in India were higher than the combined revenues of rivals Nike, Adidas, and Reebok, also a company Ganguly had worked for between 2002 and 2005.

While he was the MD at Puma India, Ganguly had said that the amount of business the company has added post-pandemic is as healthy as the first 13 years when they started in India, indicating strong potential in the athleisure category.

Puma filled Ganguly’s position of MD in India, internally after elevating Karthik Balagopalan, who was earlier the global director of retail and e-commerce at the company.