Future Retail: Forerunner Ventures And The Next Big Thing

What’s the difference between good and bad e-commerce? It’s the shopping experience, says Forerunner boss Kirsten Green. Forerunner Ventures is one of very few VCs specialising in e-commerce:

An early stage venture capital firm dedicated to investing in ambitious entrepreneurs to define and dominate a new generation of commerce

This year, Forerunner Ventures made headlines when their investment Dollar Shave Club sold to Unilever for $1 billion and their investment Jet.com sold to Walmart for $3.3 billion.

Forbes:

The $1 billion acquisition of Dollar Shave Club in particular has propelled Green out from under the radar and cemented her reputation as one of the industry’s canniest investors in all things consumer. She led the startup’s $1 million seed round in 2012. The sale yielded a return of almost 50 times Forerunner’s initial investment, far and away its biggest score.

Forerunner is now expanding its team:

The firm’s current roster — Green, partner Eurie Kim, a principal and an associate — will no longer cut it, so she’s been fielding résumés and pondering Forerunner’s next move.

Given those successes, also an even bigger fund by factor x in the foreseeable future would not surprise us.

The current fund is at $122 million:

In 2010 Green persuaded her mentor Colen to invest $5 million. It was Forerunner’s first fund and backed hits like menswear startup Bonobos. Green raised $40 million from institutional investors in 2012 and $75 million for another fund in 2014. This summer’s $122 million fund closed just before the Dollar Shave Club acquisition hit headlines.

So far, in 2016 Forerunner backed three companies. In total, the VC firm has now done 55 investments, 10 of those with exits.

A few weeks ago, Recode interviewed Kirsten Green wich brought forth some interesting insights into Warby Parker, Dollar Shave Club and other investments:

Forbes distilled down the essence of Forerunner Ventures very neatly:

While the giants of retailing — from Neiman Marcus to J. Crew — continue to struggle amid a sea of newcomers, Green remains disciplined, backing data-savvy seedlings with great stories and novel distribution approaches.

Here is an overview on Forerunner’s (not very) current portfolio:

Companies in the Forerunner Portfolio are pioneering the digital commerce revolution. By leveraging technology, consumer insights, and a deep commitment to brand building, they are developing innovative go-to-market and scaling strategies, as well as powering business model efficiencies in a quest to modernize today’s retail industry.

forerunnerventuresportfolio.png

Forerunner Ventures is also recently an investor at Hollar’s Series B funding, a mobile retailer going at dollar stores.

Forerunner segments its portfolio into Connected BrandsMarketplacesMobile ExperiencesRetail and Tools/Technologies.

Forerunner Ventures is an outlier in many regards: Not only is the VC firm specialising in e-commerce (quick, name three other VC firms doing that) but is also being run by a woman. (quick name three other VC firms run by a woman) This gives Forerunner an advantage in an industry still dominated by men building products for how men go shopping. (Amazon is struggling with this as well.)

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2 comments

  1. […] It is strange that venture capitalists invest in so many startups and at the same time, e-commerce pure players have a hard time getting money. Even though it should be obvious by now were the growth potential lies. (That is why it is wise to keep up with what specialised e-commerce VCs like Forerunner Ventures are doing.) […]

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