Maveron Launches New Start-Up Focused Fund; Klarna’s New DTC App

Maveron's new fund

DTC’s Daily Digest brings you the latest news on the world’s fastest growing direct-to-consumer brands. In today’s edition: Maveron launches new start-up focused fund; Klarna’s new DTC app; Canada Goose shares nose-dive.

Maveron launches new start-up focused fund

Maveron, a venture capital fund co-founded by Starbucks’ Howard Schultz, has closed on another USD$180m to invest in early-stage consumer startups.

The capital represents the firm’s seventh fundraise and largest to date. To keep the fund from reaching mammoth proportions, the firm’s general partners said they turned away more than $70 million amid high demand for the effort. Maveron is known for recent bets in startups such as Allbirds, Everlane, General Assembly, Modern Fertility and Eargo.

Maveron invests exclusively in consumer startups, with an eye for founders who are “unapologetically non-normal,” who value relationships over transactions, profit and purpose, and who “win the right way.” If that’s not a signal for DTCs, I don’t know what is.

The business says that “last year, 70% of the founders we backed were women and all of those founders were also CEO or co-CEO. Beyond gender diversity, we also have someone on the investment team in every decade of their lives from their 20s to their 60s. That perspective marries the experience and scars of living through multiple market cycles with youthful optimism and connectivity to today’s tastemakers and trends.”

Klarna’s new DTC app

Instalment specialists Klarna has released an app that enables consumers to shop a variety of merchants and pay with Klarna without leaving the app.

Announced Tuesday, the Klarna app presents the retailer’s site with a footer containing a Pay with Klarna button. When selecting that option, the shopper can pay for purchases in four equal installments with no interest or fees.

Instalment payments are made with a credit or debit card, though Klarna says it expects most consumers to use a debit card. The first payment is due immediately and the other three are collected every two weeks.

It’s an interesting move from Klarna, and follows Instagram’s option to make paying without leaving the app an option. Klarna’s USP is that people can pay for goods in instalments, something which will be a key feature to a lot of customers. For this reason, it makes sense to launch such an app. However, the challenge will be establishing the app as a go-to source for fashion shopping. Even though it will be an efficient process, they are going up against some established players, while social media remains a lot of people’s favourite way to discover new clothes.

Canada Goose shares nose-dive

Canada Goose’s shares have dropped more than 25%, after the high-end coat maker missed quarterly sales estimates. The business also said it expects slower sales growth in the coming years.

The slow down in growth has been attributed to the brand’s focus on direct-to-consumer selling. Canada Goose has been making its sales of coats directly to consumers, not through wholesale channels like department stores, a bigger focus, opening up more of its own bricks-and-mortar stores. Its direct-to-consumer sales were up 29.1% during the fourth quarter. And, while impressive, that was short of expectations for 40% growth.

The quarter was Canada Goose’s slowest in eight quarters, and is a warning sign of how long a pivot to a DTC model can take, before strong growth is seen. Investors may be deterred by the fact that Canada Goose is shaking up its traditional model and entering into fewer deals with retailers. However, the amount of brand equity they will gain from having their own stores, will help to counter this in the long-run.