Incubation platform Venture Catalysts has invested an undisclosed amount in Superbottoms, which makes diapers for babies.
Superbottoms said in a statement that it will use the money to develop more product lines, create awareness campaigns and expand its distribution network.
The company, which was launched in 2016, claims that its cloth diapers are skin-friendly and can be washed and re-used more than 250 times.
“Considering our diapers are healthier, more convenient and 75% less expensive to disposable diapers in terms of lifecycle cost, we believe we have a ready opportunity in the Indian market,” said Pallavi Utagi, founder and chief executive officer of Superbottoms.
A graduate of Govt. College of Engineering in Pune, Utagi had earlier worked for seven years in healthcare firms such as Piramal Healthcare and Sanofi before launching the venture. Superbottoms says it is run by a team of "15 passionate mothers".
“Even with a penetration of just about 10%, disposable diapers have become a Rs 5,000 crore industry,” said Apoorv Ranjan Sharma, co-founder of Venture Catalysts.
Mumbai-based Venture Catalysts was set up in December 2015 by Sharma, Anil Jain, Anuj Golecha and Gaurav Jain. It typically invests between $250,000 and $1 million in early-stage startups.
Its recent investments include environmental intelligence startup Ambee, car financing company OTO Capital, bike-sharing app Mobycy, medical-technology startup iNICU, operating system maker PrimeOS and virtual trial room startup Try & Buy.
In the baby diaper segment, Superbottoms competes with the likes of big players such as Procter & Gamble's Pampers, Kimberley-Clark's Huggies and Unicharm's Mamy Poko Pants.
In September, Pune-based Walmark Meditech Pvt. Ltd raised funding from SIDBI Venture Capital Ltd's India Opportunities Fund. The company makes disposable hygiene products such as diapers and sanitary pads under the brand name Wetex.
In the adult diaper segment, Mumbai-based Nobel Hygiene Pvt. Ltd is among the major players with its Friends brand. Nobel Hygiene bought diaper brand Snuggy from Godrej Consumer Products Ltd in July.