Early-stage investor H Venture Partners is betting on the benefits of the consumer sector; both for its attractive returns and the opportunities it offers to support women-led start-ups.
Elizabeth Edwards, who is also managing partner of H Venture, said its first fund, which it closed last week, will help find innovative companies and expand investment to undercapitalized founder groups.
“When I was doing a lot of tech investing, it seemed like I was the only woman in the industry,” Edwards said. “Then I got into consumer goods, and now I’m talking to women all day long because not only do investors need to be diverse, but they need to be aware and tuned in to the lived experience of the groups they’re targeting.”
Data from PitchBook showed venture capital investment into female-founded companies in the first half of the year stood at 1,623 deals, amounting to about $23.2 billion, on par with the total from last year.
Cincinnati-based H Venture, founded in 2017, closed its $10 million fund in early July. Edwards said investors include Kathy Waller, former Coca-Cola chief financial officer; Mel Healey, former North American president for Procter & Gamble; and Jim Stengel, former P&G chief marketing officer.
The fund was also backed by individuals from such retailers as Kroger, Target and cosmetics company Ulta.
Portfolio companies include clean skin care brand Kinship, textured hair care salon Naza and Cameron Diaz’s clean wine line Avaline. All three brands are female-led.
Edwards said the consumer sector continues to be exciting, especially as new entrants to the consumer space understand diversity is more important now and choose to focus on bespoke experiences.
“There are unique opportunities for brands that are very focused on one group. They’re going to speak to them intimately, authentically, and really be a brand that’s tied to one particular consumer,” she said.
This trend extends to products tackling all aspects of women’s health and for all generations. Underscoring this, H Venture invested in a company called Kindra, which manufactures products for menopausal women.
Edwards said many investors sometimes overlook the consumer sector’s potential and many do not understand how to tap into it. For example, women are responsible for 85 percent of consumer purchasing, she said. One of the areas H Venture wants a closer look at is working with Asian and Hispanic-led companies and VCs.
“We get a ton of really high-quality opportunities from Asian and Hispanic founder groups, two groups that are growing at such an impressive clip,” she said. “We feel they merit more investment because we feel they are undercapitalized.”
In addition, Edwards said the consumer packaged goods sector continues to expand as customers want more convenience, so big brands and strategic buyers are looking for new products or companies offering that experience.
But while there are more opportunities for consumer products, especially after the covid-19 pandemic, Edwards warned that it’s not an easy sector to break into.
She said there is so much technology in certain products (diapers being one example) that H Venture does not invest in a company until one of its advisers with years of experience gives it the go-ahead.
Correction: The above story was amended to note that the fund raised by H Venture Partners was backed by individuals who formerly held positions at Kroger, Target and Ulta.