Daily Consumer #27 - Announcing Our $13M Investment In Beam Impact
Plus Lululemon, REI, and others announce plans to facilitate resale of their products.
Announcing Our $13M Investment In Beam Impact
I’m in London this week. Yesterday, I walked through various neighborhoods and retail districts and was amazed at how many Ukrainian flags I saw waving from windows and doorframes. I then walked through Hyde Park and saw a large Pakistani protest in support of their ousted Prime Minister. Then I briefly walked down Regent Street which was blocked by thousands of marching protestors from Extinction Rebellion, a climate change activism group.
Our values and our identity are increasingly intertwined. And as we know, wearing a product from a particular brand represents a form of identity itself. In today’s world, brands can no longer afford to ignore the values that their customers hold. Instead, they must be align themselves with those values as well.
I’m putting my career behind this belief by investing in Beam Impact and leading their $13M Series A financing round. Beam is infrastructure that allows brands to contribute to mission-driven organizations with each customer purchase. The best part is that these contributions pay for themselves by increasing a customer’s willingness to transact with a brand and improving the customer’s loyalty after the purchase. Brands like Instacart and Ikea, who are Beam customers today, attest to this.
You can get a sense for the Beam checkout flow by clicking through to our writeup below, which was co-authored by my partner Rex Woodbury who also sponsored the investment with me.
If you run a brand and are interested to learn more about Beam, we’d be happy to connect you to the co-founders of the company, Viveka and Alex.
A huge thank you to Lucas, a reader of this newsletter and founder himself, who was the source of the introduction to Beam Impact… It’s amazing for me to be able to say that we made an investment at Index Ventures as a result of this newsletter. I’m very grateful. I would also welcome ideas from others at any time.
The global activewear market is expected to grow to $425 billion by 2025, at an annual rate of 8-10%. Business of Fashion looks into how new players like Vuori and Gymshark are taking on Nike and Adidas.
Anheuser-Busch InBev owns an alcohol delivery service in Latam called Zé. Facilitated 61M orders in 2021. Doesn’t charge consumers any fees as it makes up for them on product margin.
Uniqlo became China’s favorite fashion brand by not getting involved in politics. “Secured 1.4% of China’s hugely fragmented $350B apparel market in 2021—a larger share than any other single brand.”
A profile of Gap’s struggles and how it’s trying to bounce back. “Has been struggling for the better part of two decades, as shoppers have migrated toward more stylish and less expensive brands.”
PSG signs a 3 year sponsorship deal with Goat for more than $50M. “PSG will be the first sports team to have its own store on Goat’s e-commerce platform, which will release limited-edition merchandise, collaborations and vintage items. The Goat brand will appear on the sleeve of PSG’s kits this season and will be advertised on television, online and in the Parc des Princes stadium in Paris.”
A profile of Bolt founder Ryan Breslow who is enabling one-click checkout for a number of brands and marketplace including Forever 21 and Fanatics. Was last valued at $11B.
LVMH saw revenue grow 29% YoY in Q1 2022 to $19.5B. Saw double digit growth in all categories (fashion & leather goods, perfumes & cosmetics, watches & jewelry) except for wine & spirits. The world is re-opening and despite inflation, consumers are investing in their appearance.
Food and Beverage.
A fascinating look into the $24B global kosher foods market. “Jewish people represent only 20% of the kosher product consumer base. By and large, consumers see a kosher certification as a verification that a product is healthy, clean and safe.”
Andy Jassy, the CEO of Amazon, comments on how Amazon’s logistics network has developed in his first shareholder letter. "In the early 2000s, it took us an average of 18 hours to get an item through our fulfillment centers and on the right truck for shipment. Now, it takes us two...in 2004, we had seven fulfillment centers in the U.S. and four in other parts of the world...Fast forward to the end of 2021, we had 253 fulfillment centers, 110 sortation centers, and 467 delivery stations in North America, with an additional 157 fulfillment centers, 58 sortation centers, and 588 delivery stations across the globe. Our delivery network grew to more than 260,000 drivers worldwide, and our Amazon Air cargo fleet has more than 100 aircraft. This has represented a capital investment of over $100 billion and countless iterations and small process improvements by over a million Amazonians in the last decade and a half.
Amazon imposes a 5% fee to U.S. third-party sellers who use its shipping and storage services. “We can’t keep absorbing all those costs.”
Wix partners with Amazon to allow their merchants to use Amazon’s FBA service and ship quickly to customers who transact via their Wix shop.
Inflation continues to be rampant. "The all items index continued to accelerate, rising 8.5% for the 12 months ending March, the largest 12-month increase since the period ending December 1981." -US Bureau of Labor
Global ecommerce sales declined 3% YoY in Q1 2022.
Marketplace Academy benchmarks the pricing models for a broad swath of marketplaces. Most marketplaces for physical goods charge commissions from 8-20% and take their commission from sellers on the platform.
Amazon adds new incentives for third-party sellers including A 5% bonus on up to $1M in eligible branded sales, $200 in credits for Amazon Vine, $100 in credits for Amazon Transparency, and credits for shipping services.
Beauty Pie, a membership-based beauty brand that we backed at Index Ventures, is expanding into apparel and accessories, starting with pyjamas and an electric cleansing brush. “Beauty Pie has customer retention rates higher than Spotify and Netflix. The business turned profitable in 2021, with membership numbers and revenue both more than doubling.”
India gives WhatsApp permission to expand its payments service to 100M users in the country.
Wegmans Food Markets now accept EBT food stamp payments via Instacart across its 106 stores. Instacart now powers EBT SNAP payments for more than 60 retailers across 39 states spanning more than 7K stores nationwide.
PetSmart exclusively partners with Nom Nom, a D2C fresh and frozen pet food brand. Nom Nom products are now available at select PetSmart stores across the US and at PetSmart.com. Nom Nom was acquired by Mars in January for a rumored $1B.
Lululemon is expanding its resale program across the US this month. Called “Lululemon Like New”. Guests nationwide can trade in "pre-loved" Lulu clothing in exchange for an e-gift card at one of the more than 390 participating US stores and shop resale products online at the company's website.
REI is rolling out its Re/Supply trade-in and used outdoor gear marketplace across all stores this year. Allows its 21.5M co-op members to trade in and purchase used gear.
Target is testing a relationship with ThredUp. Launched a page on ThredUp’s website in that includes listings of women’s and kids’ apparel along with accessories.
Cuyana launches its own resale offering called “Cuyana Revive” in partnership with Archive. Participants will be able to sell their Cuyana pieces directly to the purchaser using a Cuyana product catalog to identify their items. The program will accept bags and small leather goods, while other Cuyana items go to women who have suffered abuse through the LA-based organization H.E.A.R.T.
Merrell is launching a multi-national product takeback and resale program called “Merrell ReTread”. Allows consumers the opportunity to give back Merrell footwear. Once received, the footwear will be repaired and refurbished for resale, broken down for use in new products, or recycled for alternative uses. Consumers will receive a $20 off promotion code when participating.
Dopple partners with Treet to launch a resale platform for kidswear called ReDopple. Sellers can get 80% of the sale value in cash or 100% in credit to use at Dopple as part of the new initiative.
SpotOn, a POS provider to restaurants, partners with MarginEdge, an inventory management platform for restaurants.
Amazon has multiple resale marketplaces for returned items including Warehouse Deals for used goods, Amazon Renewed for refurbished items, Amazon Outlet for overstock, and a tongue-in-cheek daily deal site called Woot!
Prosus is a believer in “quick commerce” aka sub-30 minute delivery and shares a great presentation to justify their view. Has backed multiple players in this space including Delivery Hero (more like Grubhub in its core business), iFood (more like DoorDash), Flink (like GoPuff), and Swiggy (more like DoorDash). My view is that the DoorDash’s of the world are best positioned to win this opportunity as they already have the customer and the labor. Prosus’ bullishness is probably driven by a similar view.
GoPuff generated $2B in revenue in 2021 and now has nearly 700 warehouses that deliver to 1.2K cities in North America and Europe. “But profits have been elusive. The start-up is not cash-flow positive.”
Jokr, a 15-minute delivery player, shuts down its European operations. This “instant delivery” space is cooling down quickly as companies face a tough fundraising market.
Too Faced has been testing live shopping on TikTok. On its first episode in Dec 2021, Too Faced saw 72.5K unique tune-ins and 69K engagements, which were measured in comments, likes and follows. 84% of the customers who purchased through the first live shopping event were new to the brand.
A guide to creating successful content on TikTok.
Pinterest partners with WooCommerce to enable WooCommerce’s 3.6M merchants to convert their product catalogs into Shoppable Pins on Pinterest.
Snap shares its “The SnapChat Generation” guide which suggests its users care about authenticity, connection, interactive shopping, and being part of collectives defined by values. “Snapchatters, in particular, are looking to buy into brands they can support, promote, and stand behind.”
Warehouse operators are installing solar panels on their roofs in an effort to make operations more sustainable.
Adidas and Allbirds launch their latest Adizero sustainability collaboration shoe that has less than 3 kg CO2 emissions per pair made.
Walmart launches the Walmart Circular Connector which is an online tool to link companies searching for more sustainable packaging options and those that offer them.
Vox profiles the environmental damage caused by packaging. “A recent study by Oceana found that Amazon generated 465M pounds of plastic packaging waste in 2019. The number of air pillows alone, it said, could circle the globe 500 times.”
Mattel rolled out its first carbon neutral toys, including a Matchbox Tesla made from recycled materials. Has pledged to use 100% recycled, recyclable or bio-based plastic materials in all its products and packaging by 2030.
Neilsen shares its State of Play report. There are now 817K unique video titles available on streaming platforms up from 646K in 2019. With that said, 93% of consumers plan to keep or increase their video streaming services.
Getir, a 15-minute delivery company, partners with Copia, a technology provider connecting food donations to local non-profits in need which will route surplus food from Getir stores to non-profits.
Klaviyo shares that companies that proactively recognized International Women’s Day in March generated approximately 6 times more in average Klaviyo Attributed Value (KAV), which is the amount of a customer's revenue that can be attributed to Klaviyo, than companies that did not acknowledge that day. Similarly, brands that recognized Black History Month in January generated 3 times more in average KAV than companies that did not, and the number of consumers purchasing from companies that mentioned Black History Month in their customer communications increased by 6% in Q1 2022 compared to Q1 2021.
Funding and Exits
Food and Beverage.
Umiami raises $30M from Astanor Ventures for its plant-based chicken products.
Leaft Foods raises $15M from Khosla Ventures for its protein extract coming from leaves.
Mid-Day Squares raises $10M from Siddhi Capital for its plant-based chocolate. “Did $8M revenue in 2021 with 65% in-store retail and 35% online.”
Branch raises $10M from Springdale Ventures for its home and corporate office furniture brand.
Scotch Porter raises $10M from Pendulum for its premium hair products for beard, hair, skin, fragrance and, most recently, dietary supplements. Its beard collection is on the shelves of nearly 2.3K CVS Pharmacy locations nationwide.
Genies raises $150M from Silver Lake at a $1B valuation for its digital avatars for the metaverse. Has debuted an NFT storefront with NBA Top Shot maker Dapper Labs.
The Fabricant raises $14M from Greenfield One for its digital fashion house making virtual clothing for the metaverse. Has a partnership with Epic Games and is unveiling a new collaboration will be with World of Women, the biggest female-led NFT community to date.
Steinway, a piano brand, files to go public. Reported $59M of net income on $538M in revenue for 2021.
The Honest Kitchen raises $150M from Monarch for its human-grade pet food.
Myntra raises $116M from Flipkart for its fashion marketplace. Is aiming to expand into beauty.
GrubMarket acquires Regatta Tropicals, a New Jersey-based company that distributes, packs, imports and exports high quality fruits to customers across the United States and Canada.
Choco raises $111M from G Squared at a $1.2B valuation for its B2B marketplace connecting restaurants with food suppliers. "“Is active in the US, Germany, France, Spain, Austria and Belgium and has seen the total value of goods traded through Choco exceed $1.2B. Is working with around 15K restaurant customers and 16K on the supply side.”
Material Exchange raises $27M from Molten Ventures for its B2B marketplace connecting apparel brands like H&M and Ugg with sustainable material providers.
Zaraye raises $2.1M from Tiger Global and Zayn for its raw material marketplace connecting suppliers with manufacturers in Pakistan.
Fetch Rewards raises $240M from Hamilton Lane at a $2.5B valuation for its mobile rewards app that now has 13M users and offers free rewards for customers who submit receipts of everyday purchases on its app. Has more than 600 partners, including Burger King, Unilever and Safeway.
Cerve raises $2M from Orkla Ventures for its software platform that claims to automate food wholesalers’ sales operations.
BlueOcean raises $30M from Insight Partners for its software that allows brands to measure their overall brand recognition in the market, track how specific products are performing, and the impact of different campaigns in different markets in real time.
Moot raises $18M from Espresso Capital for its software that lets a brand set up and sell through a variety of channels, including their own sites and apps, as well as third-party marketplaces, wholesalers and more. The key feature of the service is that there is a central database within the platform that can be updated to reflect activity across all of the different channels. “Is on track to make $130M in ARR by the end of this year, after growing 300% YoY in 2021, with customers including fashion retailers like Timberland and Asos.”
Lucky raises $3M from Unusual Ventures for its API that allows brands to offer local pickup options for their items at retailers when checking out on the brand’s ecommerce store.
Quiq raises $25M from Baird Capital for its AI-powered conversational platform. Customers include Overstock.com.
SamCart raises $82M from Eldridge for its creator-focused ecommerce platform. Currently supports more than 30K businesses and has processed upwards of $2.2B in sales to date.
EQL raises $25M from Insight Partners and AirTree Ventures for its “hype” focused ecommerce platform that addresses problems that occur in high demand product launches such as sites crashing, payment chaos, or backlash sparked by scammers and bots clearing out stock. “Has been involved in more than 1K product launches.”
Salsify raises $200M from TPG at a $2B valuation for its centralized inventory and product information platform serving brands and retailers. Now at $110M ARR with 1.2K customers like Coca-Cola, Libbey, and Kraft Heinz.
Zhiyi Tech raises $100M from GL Ventures, Zoo Capital, and others across 3 rounds of financing for its software that help brands better predict what and how to sell through their live commerce stores. “Scours the internet for trending styles and turns them into actionable insight for designers, such as which color, material, etc. is trending. Also analyzes apparel sales on ecommerce sites like Taobao and Douyin and breaks down the bestsellers. Also has an ecosystem of suppliers that retailers can tap.”
UrbanPiper raises $24M from Sequoia Capital India and Tiger Global for its restaurant management platform that processes 18% of all online food orders in India. Operates a one-shop app that syncs inventory and commerce flows with multiple services at once and is used by 27K restaurant locations.
Coda raises an undisclosed amount of capital from Insight Partners at a $2.5B valuation for its Southeast Asia-focused payments platform. Customers include Tencent, Activision Blizzard, and Riot Games.
MoonPay raises $87M from more than 60 musicians, actors, and other celebrities including Ashton Kutcher, Justin Bieber, Steve Aoki, Gwyneth Paltrow, Maria Sharapova, and many others. Aims to provide way for creators to manage royalties.
Montonio raises $12M from Index Ventures for its SMB-focused payments orchestration platform that handles any type of payment method but specializes in account-to-account payments which are increasingly popular in Europe due to their low cost. Montonio has been building out open banking connections.
Sika raises $6M from Forerunner Ventures to enable consumers to purchase products with their FSA and HSA dollar on merchant storefronts. “An estimated $25B in FSA and HSA funds goes unspent every year.”
Shipium raises $27.5M from Insight Partners for its enterprise-focused shipment booking software company. Says it can reduce shipping costs by over 5% and speed up estimated delivery by several days. Has processed nearly 10M shipments in the past 9 months.
ProductDonation of the Week
This week, I recommend donating to the World Health Organization which is providing health care supplies to the many in need in Ukraine. Donate here. ❤️🇺🇦