Follow The Money | F50 Post I

Follow the Money

In advance of the release of the 4th annual Foremost 50 List, in partnership with Listrak, we examine the high-level investment trends that stood out in 2021.

By Jordan Brenner
Staff Writer at The Lead

There is one thing we can say for a fact: 2021 brought a lot of changes. From crypto and blockchain to the metaverse and NFTs, investors and brands alike are changing the way we see fashion, retail, and the consumer.

2021 was also one of the biggest years for funding thus far. Per Crunchbase, investors put in an astounding $329.5B into startup investments. And not only was it the biggest year for total funding, but we also saw an increase in average deal size. Although a majority of the funding went to tech startups, the retail industry was not forgotten. Follow the money with us to see how the retail industry was impacted.

Infographic showing the ways we analyze brands for the foremost 50

To learn more, join us at The Foremost 50 Forum on March 22nd:

In 2021, the standout D2C companies that impressed investors and received the most capital were from the apparel, beauty and fragrance, home, and personal care industries.

With consumers being stuck at home due to the COVID-19 pandemic, it is not surprising that the home industry was (and is) booming. The average home is getting much more attention and investment than usual — from sustainable household cleaning products to lawn care subscriptions. Quarantine mandates and a new work-from-home environment drives this boom to better the consumer’s space.

The Covid-19 pandemic has also affected the personal care industry. Investors see that consumers want to spend money on themselves and their well-being. Companies like Quip, an oral care company that received $100M in funding, and Maude, a sexual wellness company, help consumers focus on their main concern: taking care of themselves.

Apparel has always been heavily funded due to the necessity of its nature. But with emerging technologies coming out for the new digital environment, fashion tech companies are seeing an increase in investment money. Athleisure companies are also seeing an increase in popularity with investors. Vuori, a men’s athletic wear company, received $400M in funding.

In the beauty and fragrance industry, we are seeing more clean and sustainable brands being created to keep up with health and earth-conscious trends. As seen in prior years, K-beauty companies are also still holding power with investments.

Info graphic showing industries that received the most funding in 2021

Growing Profitably

High-growth brands are going to use much of the investment to fund customer acquisition — both through marketing as well as store expansion. But in recent years investors are even more focused on a path to profitability as they fund D2C brands.

The days of fueling brand growth through simply pumping investment in digital marketing are behind us. Marketing dollars have to work harder in this highly competitive e-commerce environment.

According to Karen DiClemente, Senior Strategy Director at Listrak, “In a post cookie world, the challenge for growing brands is that they don’t know how to best convert all their website traffic. For example, when an influencer promotes a brand and sends followers to the website, brands have to be able to identify those visitors, collect their zero-party or first-party data, and personalize their experience (and any future experiences) to influence a purchase and ultimately drive revenue. Investments in technologies such as Listrak’s integrated marketing automation platform transform marketing from a scattershot approach to a systematic conversion framework.”

At The Lead, we are excited to feature the next generation of high-growth brands that are not only changing the product categories they are in but also the way brands go to market in this era.

Listrak delivers superior results for more than 1,000 retailers like vineyard vines, Kendra Scott and Uncommon Goods, by providing best-in- class email, SMS, behavioral based triggers, and identity resolution – all from a single, integrated platform.