VCs Say These Are the 10 Rising-Star Consumer Startups to Watch

• Each startup on this list has raised $90 million or less in VC funding.
• VCs are placing bets on which of these rising stars will grow into lasting brands. 
• Two companies on the list, Creative Fabrica and Newness, have each raised less than $10 million. 

Consumer companies for livestream shopping, ticket resale, and collectibles have been making headlines. 

Whatnot, a live-shopping app for collectibles, landed a $260-million Series D deal in July that DST Global and Capital G, which took the company’s valuation to $3.7 billion, led. Fever, a ticket marketplace for live events, raised $227 million from Goldman Sachs in January, which vaulted the company to unicorn status. The success of these categories reflects the pandemic’s long-term impact on consumer behavior now that people are beginning to find their new normal. 

Some VCs have already begun courting the next generation of consumer startups.

Six consumer-focused VCs that Insider spoke to said they’re looking for companies that are raising less capital than their predecessors to scale their brands. These VCs also said that they’re no longer interested in funding brands that simply challenge an existing one as they may have in years past. Instead, they said they’re raising the bar for what consumer services they are investing in. Amid the rising costs of customer acquisition on platforms like Facebook, Instagram, and Twitter, four VCs said they’re looking for companies that have already built a loyal and consistent base of customers. 

Amanda Schutzbank, a partner at Willow Growth Ventures, led the $5.3-million seed round for Coterie, a direct-to-consumer diaper brand, in December 2021. Since it launched in 2019, Coterie has sold more than 80 million diapers, but has only raised $34 million in funding, according to the company. Schutzbank points to Coterie’s dedicated customer base as one of the reasons behind its sales growth. 

“Coterie’s strongest customer-acquisition channel has always been word of mouth,” Schutzbank said. “When I first looked at investing, I was a new mom with a young baby at home. I started to hear other moms talk about how ‘life-changing’ this diaper was.”

VCs have also been rethinking the amount of capital they injected into direct-to-consumer brands like Harry’s, Rothy, and Away. Now, amid the market downturn, the pressure for companies to keep costs low is higher than ever. VCs are looking at how consumer marketplaces enable their users to build capital-efficient brands. 

M13, a venture-capital firm based in Los Angeles, was one participant in a $20-million Series A round that Shef raised in June 2021. The platform connects home chefs looking to sell their food with customers, and has raised less than $29 million to date, according to the company. 

Christine Choi, a partner at M13, said “the average cost of starting a restaurant is more than $350,000 — something that’s far out of reach for most people. By connecting talented cooks directly with local customer bases in 10 states across the country, Shef provides an early on-ramp to food entrepreneurship.” 

Insider rounded up a list of 10 companies that VCs believe are paving the way for the next generation of consumer brands. The list relies on interviews with VCs and references to Crunchbase and Pitchbook.