When enterprise capital agency Cavu started investing in beauty in 2020, it was based mostly on the premise that the focus of “better-for-you” manufacturers had expanded throughout the pandemic. Cavu began by investing in the meals and beverage space earlier than making its first beauty funding in clear beauty model Osea. Jenna Jackson, principal at Cavu, stated this shift in funding technique occurred as a result of the shopper has expanded their notion of wholesome residing. Cavu has additionally invested in Hims & Hers, physique care model Nécessaire and ingestible model Vital Proteins. Cavu’s verify sizes are $10 million-$15 million.
Jackson spoke to Glossy about what’s behind Cavu’s ethos, why Osea was the agency’s first beauty funding and the way it’s dealing with the present financial uncertainty.
Why was your first beauty funding in Osea?“Osea Malibu was based in 1996. They took their first [outside] cash 25 years into the firm. If you assume about class creators, and also you assume about clear and inexperienced in 1996, folks thought they had been a bit nuts after they first began. But it’s been this true, genuine mission and values system that they’ve had for 25 years. When we first met with them they usually had been contemplating taking exterior capital, it felt like an ideal match, from a mission and values perspective and the class creation lens we [wanted to] spend money on.”
How is Cavu navigating the present financial local weather?“From a beauty perspective and throughout the portfolio, we’re open for enterprise. We’re taking a long-term partnership method versus a fast turnaround and a quick sale. When we predict about a recessionary surroundings, beauty has historically been a robust class on this space. And through Covid-19, the buyer shifted their lens after they thought about beauty; they thought about it as a wellness class. They checked out beauty as taking good care of themselves a lot the similar approach as better-for-you meals. We’re optimistic about the beauty space through any recession.”
How do you’re employed together with your manufacturers post-funding?“We have an in-house advertising and branding group known as Uncommon, they usually work with manufacturers throughout e-commerce, Amazon, social media, PR, influencer relations and packaging. We attempt to not restrict ourselves through conventional VC or non-public fairness obstacles. [We] assume extra about [the fact that] when you may have an awesome product market match and distinctive product, you’re making a class. And [we consider] how we will put not solely cash however a partnership [into play]. We even have an in-house head of expertise that helps place [employees] inside manufacturers. It’s a bit little bit of a menu. Some manufacturers have unbelievable packaging and gained’t use [Uncommon] for that, however they may need our assist in their TikTok campaigns and we will have them speak to our group.”
What traits are you seeing in the beauty business and funding space?“Customers usually are not simply pondering about cleaner components. They’re pondering extra about cleaner components, sustainability, transparency, neighborhood and inclusivity. What we search for is somebody doing one thing distinctive and totally different. When you assume about Nécessaire, for instance, everybody was targeted on clear beauty for the face, however nobody was pondering about the neck down. And it’s not solely a extremely efficient product, however it’s going to be beautiful; it’s one thing [that makes] you need to take a shelfie of your bathe.
From an funding [trends] perspective, there’s a larger barrier to what VC and PE need to spend money on. There was a time frame when folks had been excited about beauty as a result of it had nice margins, and other people had been spending cash there. There was quite a lot of funding going into that. They’re nonetheless excited about it, however there appears to be the next barrier given the recessionary financial surroundings. I’m not listening to, ‘We’re closed for enterprise,’ from an funding perspective, however most companies are taking a look at their very own model portfolio and seeing who may want cash in the subsequent 18-24 months.”
https://www.glossy.co/beauty/cavu-vcs-jenna-jackson-were-optimistic-about-the-beauty-space-through-any-recession/
