Advisory agency Grwth Club has launched a consumer venture fund to address a funding gap for fmcg startups.
Grwth Ventures was founded by Joe Benn and Jake Higgins with a £5m cornerstone investment from media agency MNC.
The new fund is aiming to invest between £250k and £1m in businesses with revenues of £1m-£3m in the consumer and consumer tech space.
Benn, who co-founded Ugly Drinks in 2015 and has previously worked for Vita Coco, told The Grocer the agency was ideally looking to back profitable brands or those with “at least with some sensible customer economics”.
“We fundamentally believe there is currently a funding gap between when businesses currently raise from angels and when they go out to VCs,” he said. “We want to fill that gap.”
Grwth Club launched in early 2022 offering an agency matchmaking service, while its Grwth Advisory division specialises in strategic growth support, with the group’s clients including the likes of Yfood, Surreal, Genius and Grind.
“The startup market is undergoing a fundamental shift,” Benn said. “This is even more pronounced in the consumer industry. Historically high valuations, combined with a growth-at-all-costs approach, have put many good businesses in tough situations.
“The Grwth Ventures team will look to align valuations with realistic exit multiples, investing patient capital into businesses with strong underlying economics at the seed and Series A level. We’ll focus on sustainable growth, which is the medicine needed in current market conditions.”
Grwth Club will look to take board seats as part of the investment and give businesses access to the wider Grwth network.
Higgins, who is formerly VP of growth at DTC menswear brand Spoke and was head of growth and venture partner at recently exited VC fund Forward Partners, added: “Our business was founded on the premise that we would ‘unbundle’ the traditional VC model and rebuild it for the modern economic environment. That’s why we initially started with a service that matches startups with agencies of all disciplines.
“We then built a prestigious fundraising advisory service that focused on bringing family offices into the consumer space. Grwth Ventures represents the final key step in the process.”
Benn said: “We’re excited to get investing and it is great to have a head-start on deal flow given the work we’ve been doing supporting hundreds of startups over the last two years.”
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