Fashion and capital market junkie6/3/2023 “We aren’t looking at companies that are trying to solve the short-term Covid problems,” said Caitlin Strandberg, a principal at Venture Capital firm Lerer Hippeau, which has invested in startups like Allbirds, Casper, Everlane and Glossier. This doesn't mean start-ups have to produce PPE. Investors are interested in companies that are spotting consumer trends coming out of Covid-19. “There was room to support companies pursuing the hyper-growth strategy because capital was freely available, but now that the market has retracted, as an investor, I’ve got to quickly pivot to profitability,” said Daniel Gulati, founding partner at Forecast Fund, which has invested in companies like Away and Italic. Investors are now looking at brands that have a proven track record for organically building audiences, and are creating products that are unique and not just another direct-to-consumer copycat. The global pandemic has exacerbated investor's hesitance in investing in consumer brands, since consumer spending is on the decline. Multiple founders have told BoF their fundraising plans were put on pause while investors assess the new normal. Many start-ups, particularly new clothing and beauty brands, do not.Īs an investor I've got to quickly pivot to profitability. Otrium, which lets brands like Scotch & Soda, Reiss, Esprit and Guess sell off their end-of-season product on its platform, fits Hebel’s criteria. “We’re looking at companies that will sail through the macro-tail winds of. ![]() “The ability to thrive in this new environment is important to me as an investor,” said Davor Hebel, a managing partner at Eight Roads Ventures, which led Otrium’s latest round of funding. It's a 180-degree shift from the mentality in Silicon Valley before the pandemic, when growth was often prioritised at the expense of profitability. Some, including Otrium, could even thrive as fashion reels from store closures and weak consumer spending. What many of the start-ups raising money these days have in common: they are seen by investors as recession-proof. ![]() Then there's Otrium, an Amsterdam-based company that promises to help brands sell excess inventory, which raised $26.4 million in May. Resale platforms have had no trouble tapping investors, with Vestiaire Collective raising €59 million at the height of the lockdown in April and Rebag raising $15 million in May. The companies that have managed to raise money since then point to a starkly different reality. The venture capital market pretty much shut down along with the rest of the global economy soon after. NEW YORK, United States - In January, as the first cases of Covid-19 were detected outside China, fashion’s start-up scene was pretty much carrying on as normal: among the companies nabbing investments were luxury multi-brand e-tailer Moda Operandi, footwear espadrille seller Sea Star Beachwear and a host of new beauty brands.
0 Comments
Leave a Reply. |