Tech and consumer trends. Retail tech, new commerce, conscious brands. An Interview in French media, now in English 🇫🇷🇺🇸. Now Fab Fund II!
An article published initially in French in FrenchWeb, interview Laurence Faguer.
Trends Tech and consumer brands in the US. Being a Seed Stage VC in L.A., I share the translation of the article in English for our multicultural Fab friends. Thank you for the support!
Here it is:
Context: Companies backed by VMS have raised 330 billion dollars in 2021, doubling 2020, Laurence Faguer reminded us in the @Frenchweb article (a European iconic media for startups, retail, and innovation).
Question: Did consumer brands benefit from the trend, with new fundings?
Her Interview with Odile Roujol, Founding Partner of Fab Ventures, based in Los Angeles and San Francisco. Fab fund I was launched in May 2019, in the midst of the covid crisis, and she’s about to raise her fund II.
“VC money has gone to late-stage and Saas for the past two years. This requires reinventing D2C models.”
The wave of investment has rather benefited startups in the late stage, at the growth stage (series B, C, and later). And more to Saas than to consumer brands. With supply chain challenges, competitive search for talents, and CAC exploding in cost, some opportunistic VCs have dropped out of the category. Those whose job it is are there!
Top tier VCs are now focusing with their latest large funds on platforms using artificial intelligence (eg Forerunner ventures with Curated AI and The Yes, and Faire-wholesales), requiring massive capital. There is a place for smaller funds, focusing on the Seed stage.
-Fab Ventures, fund I, was launched in May 2019. You have now 18 startups in the portfolio, and you are now raising fund II. How would you define your positioning in the US ecosystem?
Personally, I think that most exits in the retail, fashion, and beauty categories will always be Mergers & Acquisitions. My previous background (having had the chance to work for global brands) makes me respect large groups, and I believe that Fab has a unique place in the ecosystem, including the world of startups: understanding what entrepreneurs want for their clients, thus shaping our future, and the value that what they build can represent for a large global company.
Some entrepreneurs here spend their time raising, every 18 months, and I see valuations sometimes double or triple from two years ago with the same metrics yet, and some of my fellow VCs still get excited.
I believe in entrepreneurs who know their community and their customers very well. Develop excellent products convinced that success comes from loyalty (retention rate matters, customer satisfaction too). And are looking for a virtuous model of long-term profitability.
-Have women and “underrepresented founders” benefited from this wave of investment?
Few, because they are often still in the early stage. Fab is very well positioned in this context, with a value-added well perceived by entrepreneurs, and also by other VCs. I often come right after business angels, the first VC investment (like Shaz and Kiks which just got into Sephora Accelerate, or Bubble now into 4000 Wallmart stores). VCs often look for scores of several months of sales, I position myself before: knowing the categories well, I take a calculated risk, which creates a relationship appreciated over time.
“Fab Ventures Fond I. 18 startups in 18 months. Ready for Fund II!”
-What’s next? Still, focusing on the US market?
Now Fab has a portfolio of 18 Beauty and “wellness, Fashion startups, which are already launching internationally.
We are in the process of raising Fund II, with the first successes of Fund I after almost 3 years of investment. Fund I is like a “Proof of Concept” as a new emerging Fund.
We invest in brands on the verticals mentioned, conscious, focused on our impact on the planet and on our health (“conscious and sustainable”). Now, we can be bigger.
We are continuing to invest in fund II, still in major in the United States. We are based in Los Angeles, the city of different influences, at the crossroads of tech and content, communities, and we are lucky to have established long-term relationships thanks to the Fab community with entrepreneurs (startup founders ) and Venture capitalists who invest in the same field, and in early stage.
The US is a huge market, and from here we can scale according to ambition and vision in Asia or Europe then.
-Don’t you have any competition between fab founders in your portfolio within the same space?
Especially when we talk about GenZ and Millennials’ needs, there is a place for disruption, and for many startups founded by their generation! But you are right, I always take care to avoid having the same angle: for women’s health and women’s wellness, Bloomi is about sexual wellness, Stix focuses on the embarrassing problems women have to fix (UTI, yeast infections, and pregnancy tests).
Solidarity, helping each other is key for Fab founders.
“Fab Ventures is a growing tribe, inspired by the values of FAB Community, global and multicultural.” ( Image lay-out by Laurence Faguer)
For start-ups in the early stage, the focus is on talent and entrepreneurs.
I am lucky to have founders (and their co-founders) trusting me, understanding that I bring time and skills to help them grow their business faster, “hands-on” being a solo GP. It is clear that I also open my network to them, and also that they help each other on subjects as different as Growth marketing, supply chain, or talents.
It’s like a big tribe. In the context of “greenwashing”, what matters is to apply a relevant and concrete ESG (environmental social governance) strategy. We have created a “sustainability council”, a committee that shares ideas for metrics and shows our progress. The most important thing for startups is to have a clear message because it is difficult to be on all fronts. And if large groups focus due to their size on “carbon-free” or carbon compensation promises, for a start-up the role of evangelization is very important. Create awareness for everyone. Educating the ecosystem. All stakeholders.
“Sustainable. Recyclable. Circular. We read that everywhere, the important thing is to awaken everyone to the gestures they can make every day. And to progress every year.” ♻️🌎
For example, Chloe and Stuart founders of Thousandfell are “climate activists”, they clean the beaches near NYC where they live, manage their supply chain and the recycling of their sneakers, form alliances with associations, create a powerful network with other entrepreneurs in fashion and the circular economy.♻️🌎
Laura and Liza founders of Brightly are one of the first eco-conscious podcasts on Apple, have a community of more than 23,000 ambassadors and are growing very quickly on Tiktok and Instagram, with GenZs enjoying their educational and funny videos.
“We can make a difference” making imperfect gestures every day is better than doing nothing. It is up to everyone to apply it to their wardrobe, their home, and their beauty routine.
Finally, some of the companies I finance are revolutionizing fashion through materials, such as Kintra Fibers, which is also in partnership with the beautiful brand Pangaia (casual fashion, natural colors).
-Fab Fund II will be there a Difference of thesis of investment for the FUND II vs Fund 1, will it be on The buzz words of the moment (even if the trend is here for good): NFT, metaverse, Web3?
“Retail-tech” 🛍✨… will be the priority: how to create experiences for the end customer that allows him to benefit from the products and services at best. And of course New commerce: new shopping behaviors, platforms that enable connections/education, sharing content of experts and peers.
It may be my 6 years at Orange where the engineer is king, and the fact of rubbing shoulders with a lot of “tech people”, I believe that technology and the in-depth knowledge of our customers will create a particularly interesting new period for all of us.
We have a new investment to be revealed soon in the intersection of e-commerce, influence, and Livestream, and I’m so excited by the space!
The other difference will also be to invest larger amounts. On average $500K at 1M against $250K on average for the fund I.
And always of course, above all to financially support in their growth: women entrepreneurs, and what we call in the United States the “underrepresented founders”, Asian-American, African-American, Latin-American, and also LGBTQ entrepreneurs, who understand the unmet needs in our industries, some of them being inspiring influencers here on the topics of inclusion, and gender identity.
For example, I am proud to have invested in Thirteen Lune founded by Nyakio Grieco and Patrick Herning, which allows brands for black and dark skin to have a beauty platform in a fragmented world, and to be in the points of sale JC Penney.
Nyakio is one of the few black women who have received funding from VCs (2% for women of VC capital, less than 0.2% according to the latest studies for “Black Female founders”). She is impressive with the brands she supports, it’s a team. She knows their difficulty having launched her brand herself. Warm, generous, inspiring!
Another example is the Very Good Light community, and now Good Light World, co-founded by David Yi. Author of “Pretty Boys”, activist denouncing “Asian hate crimes” in the United States, he is a true role model, recognized even in Asia. Korea whose culture he shares, and China of course. He has just signed with Cult Beauty in addition to a major American retailer, which shows that basic trends, “gender inclusivity” are international movements and not local ones. We invested with Fab Fund I ahead of the launch of their Beauty line in March this year. And continue to invest.
-What can we wish Fab?
New LPs (investors in a Fund) convinced that they can have an impact and move the lines!
And to learn from the new generation of entrepreneurs, while supporting them.
I believe in long-term relationships and shared values. I am lucky to have luxury and beauty groups, family offices, and Business Angels as LPs, they bring added value to what we are building with entrepreneurs.
For Fund II, I am very happy that the conversations are rich in the different verticals, and that we have the potential to have investors from different continents! We support daring entrepreneurs, purpose-driven, I call them “change-makers”. As Aquis/K18 has already proven in the Fab fund I portfolio, they all have an international ambition.
We want massive Market-Building with outsized social and environmental impact.
Laurence and Richard (French Web : https://www.frenchweb.fr/tech-et-consumer-brands-les-tendances-us-vues-par-odile-roujol-vc-a-los-angeles/431977 🇺🇸🇫🇷), Thank you so much for this interview opportunity, from the start, your support to Fab Fashion and Beautytech community, and now Fab Ventures. France has great decision-makers, and the ability to create bridges with other ecosystems. I’m personally proud to be French, living on the West Coast. Maybe having a different culture makes me more aware of the new needs that founders see. I love what we are building for sure!
Fab Fund II
Thesis: Direct-to-consumer and retail-tech, new commerce, emerging customers, sustainable & inclusive
Criteria: Purpose and Data-driven founders
Location: Bay Area/ LA investing in the US (and abroad)
Check Size: $500k to 1M
Contact FAB ventures: email@example.com or Odile Roujol on Linked in.