Imaginary Ventures raises $500M to invest in retail, Web3

What does retail look like in Web3?

That’s the question Imaginary Ventures–a four-year-old venture capital fund behind buzzy brands like Glossier, Everlane, Reformation, and Stripe–is trying to answer as it moves into the future of consumerism. Today, Imaginary is revealing its third fund raise, which totals $500 million across early- and late-stage investments, thus bringing it to over $1 billion assets under management as it seeks the next big bet.

Launched by Net-a-Porter founder Natalie Massenet and VC veteran Nick Brown, Imaginary’s portfolio skews retail-heavy. It counts luxury clothing bazaar Farfetch, clean beauty brand Kosas, and Kim Kardashian’s shapewear line Skims among its other companies. The partners’ expertise is strong: Massenet chaired the British Fashion Council for years, and Brown led investments in brands like Goop, Outdoor Voices, and The Real Real at a previous fund.

And, as they tell Fast Company, they’re excited to invest in this current moment of global transformation. As Massenet explains, there are four types of cultural phenomena that the fund often mines for gold, one being “mind-blowing, once-in-a-lifetime shifts spurred by tech innovation”—something we’re living through right now. It’s kind of like 1999, she says, when Yahoo had just developed a search engine and Amazon was in its infancy—except this time, the revolution is coming in cryptocurrencies, AI-learning, and robotics. And it’s present everywhere, from how marketing data is collected, to how goods are sold in peer-to-peer marketplaces.

Driving much of the change is Web3, which Imaginary notes is a focus of fund III. According to Brown, their network is evolving with the times. “In some of our brands, there’s a real need and desire from the consumer end for digital product,” he says. “Companies are actively thinking about how their brands will manifest in the metaverse. Authentication and traceability of products is another conversation they’re having in real time.”

On their end, Brown and Massenet say they’re tracking such trends as the gamification of commerce through the metaverse, virtual shopping malls like Decentraland, and the applications of digital fashion for avatars.

That said, the fund will stay pragmatic, Massenet says. While they’re all for what she calls “big blue sky thinking . . . the businesses we back in that space will be the ones with the most credible route to market, and who understand how to scale.”

What might that look like? They’re not sure yet—but marketing could have a lot to do with it. According to Brown, he has found the businesses that are most successful in securing repeat customers are those that advertise in new and creative ways—namely, outside of Facebook. (Those that spend the majority of the dollars on Facebook, he says, are struggling the most.)

The metaverse will undoubtedly be part of omnichannel marketing in the future, says Massenet—but there are some things that can’t quite be replicated online, and the pair is still bullish on physical stores. It might just be the next generation of what has long existed. “Decades ago, you would see products in a gardening magazine, then get the impulse to go to the store and purchase it,” she says. Now, you might do that in the metaverse, but still end up in a store that sells tangible things.

“The population still has to walk around in physical clothes, and drive in vehicles . . . the physical world is real,” says Massenet. “And our focus will be where the consumers transact.”