Rahul Jain, Strategic Growth Advisors

India’s direct-to-consumer (D2C) funding market is entering what industry executives describe as a more mature “2.0 phase,” with investors increasingly prioritising profitability, repeat consumption and offline scale over discount-led digital growth.

Industry executives said the shift is also being driven by changing consumption behaviour among Gen Z consumers, who are increasingly prioritising authenticity, community influence and personalised products over traditional mass-market branding.

“Gen Z consumers rely far more on peer communities, creators and digital discovery than traditional advertising while making purchase decisions,” said Keyur Dhami, SVP – Customer Success (Key Accounts) & CoE at WebEngage.

Rahul Jain of Strategic Growth Advisors, said India’s D2C sector is moving beyond its first wave of digital-only expansion into a more disciplined phase where authenticity, consumer trust and sustainable growth matter more than aggressive advertising.

“Heavy advertising spends are out of the window today,” Jain told businessline. “It is more about genuineness, openness and truth about the product. If you are creating content around your product, the product itself will take over.”

Wellness emerges as the biggest funding magnet

One of the clearest shifts in the market is the growing investor preference for wellness, nutrition and protein-led businesses, where repeat-consumption cycles create stronger lifetime customer value.

Executives said newer D2C brands are no longer merely competing for market share in existing categories but are increasingly creating premium sub-segments around protein, clean beauty, wellness and specialised personal care.

“D2C is no longer just fighting for share in existing markets. These brands are creating entirely new consumer segments and premium niches that traditional mass-market companies often overlooked,” Dhami said.

Women’s hygiene and shapewear brands also saw investor interest, with Pee Safe raising about $32 million, UnderNeat securing nearly $6 million and Kivvy raising around $0.7 million, reflecting rising consumer spending on repeat-use wellness and personal-care products.

The report shows wellness and nutrition startups attracted some of the largest funding rounds this year, led by The Whole Truth, which raised nearly $66 million, and Kapiva, which secured over $60 million.

Quick-commerce platforms and ecommerce now account for nearly 45 per cent of protein-category revenue, accelerating both product discovery and repeat purchases and reinforcing investor preference for recurring-consumption businesses over impulse-led discretionary categories.

Fashion pivots from online virality to offline scale

Fashion remains one of the largest funded D2C segments, though investor focus is now shifting from online virality toward operational scale, inventory efficiency and offline expansion.

Menswear fast-fashion brand SNITCH and luxury fashion platform Purple Style Labs attracted nearly $40 million each, while ethnicwear player Libas secured around $18 million and custom menswear startup The Pant Project raised about $4.25 million.

The report highlighted that fashion and apparel accounted for nearly 60 per cent of D2C retail leasing activity in the first half of 2026, signalling that investors are rewarding brands building omnichannel retail capabilities rather than relying purely on digital customer acquisition.

Jain said the distinction between D2C startups and traditional FMCG companies is beginning to narrow as digital-first brands rapidly expand physical retail presence alongside ecommerce.

“Today, an equal amount of sales are coming from offline channels, which means the line between D2C and FMCG is getting blurred,” he said.

Science-led beauty brands attract capital

Beauty and personal care continues to remain one of the most active D2C funding categories, though investor preferences are shifting toward ingredient-led and science-backed brands.

RENÉE Cosmetics and Foxtale raised nearly $30 million each, while SkinInspired secured around $2.9 million and FAE Beauty raised nearly $2 million.

The report suggested India’s beauty market is entering a more mature phase where consumers increasingly prioritise ingredient transparency, efficacy and dermatologist-backed formulations over influencer-led branding alone.

Jain said successful modern D2C brands are increasingly being built around four consumer pillars, convenience, community, content and credibility, rather than expensive acquisition-led growth strategies.

In many ways, India’s latest D2C funding cycle signals a broader reset in consumer investing. Capital is no longer flowing primarily toward brands that can merely generate online visibility, but toward businesses capable of converting consumer attention into repeat purchases, retention and profitable scale.

Trust becomes the new valuation metric

The broader funding trend suggests India’s direct-to-consumer ecosystem is undergoing a structural reset, with investors increasingly rewarding brands that can demonstrate repeat purchases, stronger unit economics, omnichannel execution and higher consumer trust.

The report argues that capital in Indian direct-to-consumer brands is “no longer chasing vanity growth” but backing companies that combine cultural relevance with operational discipline.

In many ways, India’s latest direct-to-consumer funding cycle signals that the market is no longer rewarding brands simply for getting discovered online.

Increasingly, capital is flowing toward businesses that can convert visibility into retention, and retention into profitable scale., Jain of SGA further added

Published on June 9, 2026