Understand the consumer to build world-class brands, an active partner profile

Active partners was founded in the early 2000s, originally as a single-family office, with a mission to support the UK’s best consumer entrepreneurs and unearth the iconic brands of tomorrow. The team has grown from our three founding partners to 15 of us, most of whom have joined within the last five years. When we started, we were one of the first investors in Soho House, Rapha, LEON and Finisterre when they were much less known. We have been privileged to partner with them and support their growth into the global brands and household names they are today.

I joined Active in 2016 at the start of our evolution from a family office to a fund-based strategy, and over the past six years I have been involved in a host of exciting investments and partnerships with amazing founders. I currently sit on the board of Honest Burgers (UK burger restaurant), Taylor & Hart (personalized and tech jewelry), Piglet in Bed (durable homewares), Facetheory (clean skincare), Subdial (watches from second-hand luxury), TALA (sustainable and affordable sportswear) and Puttshack (experience-based hospitality).

We invest at all stages of growth and take a flexible approach to our partnerships. We currently invest from two funds – our largest growth fund for businesses that are on the verge of rapid growth where we invest between £5m and £15m and our seed fund which supports brands, startup technologies and platforms with checks between £200,000 and 750K. Our growth fund takes a different approach to ‘traditional’ venture capital, making a small number of investments each year and working closely with each brand partner to successfully scale the business.

What sectors are you focusing on?

We are a specialized consumer fund. Our investment thesis is focused on supporting businesses across the consumer landscape that are mission-driven with exceptional levels of product quality and service at their core. We seek out brands that redefine the consumer experience, whether creating entirely new categories or challenging large markets ripe for disruption, which have the potential to be the iconic brands of tomorrow.

We know that a strong brand creates long-term value creation, so we look for companies that experience high levels of consumer engagement and build strong communities. More than ever, consumers are looking to connect with brands that uphold their values ​​and have a point of view. Putting community at the center of everything brings your consumer on the journey and sets you apart.

Can you tell us about your current portfolio?

Our current portfolio is made up of companies spanning the entire consumer landscape, from hospitality (Honest Burgers, Secret Cinema, Puttshack), to fashion, apparel and accessories (Finisterre, TALA, The Fold, Cubitts), education (Code First Girls), home goods (Piglet in Bed, Vinterior), luxury (Taylor & Hart, Subdial), beauty and wellness (Facetheory) and travel (Context, TravelLocal).

Alongside a wide range of sub-sectors within the consumer ecosystem, we have invested in several different business models, from D2C brands (online and via bricks and mortar) to B2B2C marketplaces and models. Technology is rapidly changing the landscape of the consumer industry, which drives one of our focus on technology-enabled and technology-driven consumer solutions, but without losing sight of the value of experiences and propositions. of the real world.

We have made several investments this year that we are really happy about. We recently announced our investment in Code First Girls, an education company that helps women code for free education and jobs, close the gender gap in tech, and accelerate opportunities for women to enter the tech industry . They partner with blue chip companies and public bodies like NatWest, Goldman Sachs, Deloitte and GCHQ to place women in tech jobs and aim to help one million women learn to code and find a tech job in the next five years.

Earlier this year we invested in TALA, the sustainable activewear brand founded by fitness entrepreneur Grace Beverley. Activewear is a largely underserved part of the sustainable fashion movement and TALA is on a mission to make it more accessible from a price point of view. We also recently announced our first seed fund investment in Urban Legend, a healthier sweet bakery brand for you. They are revolutionizing junk food by using cutting-edge food science to develop low-calorie sweet treats and have just signed a major deal with Tesco.

What are you looking for in a founder?

Founders bring magic to a brand. They have the vision, drive and ambition to build something truly different. So, we’re always looking for that spark, passion and commitment from the founders to solve a real problem for a consumer or deliver something new that will change a consumer’s life for the better. Different founders will naturally have different strengths or areas of focus, so we also look for leaders who want to combine their talent with subject matter experts and people who believe in a partnership approach.

What does the future look like?

The consumer economy has gone through a period of rapid change in recent years, driven by the pandemic and shifting consumer priorities. There is now even more focus and prominence on conscious consumerism and emerging brands need to think about building a business that embeds sustainability across the business, rather than a nice to have.

The pandemic has also accelerated consumers’ shift to online brands and DTC has seen a huge surge in demand and investor interest. This year we’ve seen DTC brands fall out of favor with some investors due to a perfect privacy storm, covid overvaluations, a return to physical stores and broader market conditions. We believe digital remains vital to business, but DTC has been misunderstood as a business model – it’s one marketing channel among many and one route to market among many. Brands today must now think more consistently about their omnichannel presence and be present where their consumers are, reflecting the complexity of today’s customer journeys.

One area we are passionate about is wellness, from mental and physical well-being to financial well-being. There are plenty of innovations in services and platforms that are improving access for users in growing categories, driven by some inspiring entrepreneurs.

Finally, I think any conversation about the consumer sector at this point needs to take into account the current economic climate. Our view is that companies that are truly differentiated with a clear proposition and have built strong communities of followers will stand out. We work closely with our founders to navigate this environment and prioritize where to focus our efforts. We believe there are many opportunities for consumer entrepreneurs and we see many amazing companies tackling real consumer issues across the industry.

What makes Active Partners different?

We put a deep understanding of the consumer at the heart of what we do, then think flexibly about a business model rooted in that understanding of what consumers are truly looking for. We also bring a flexible approach to investing through the different stages of the growth journey, starting from seed. Based on decades of experience building world-class brands, we have the long-term perspective necessary for success across the category while bringing the day-to-day know-how to support founders and their teams wherever they might. need it.

What advice would you give to founders?

If you’re looking for capital (which isn’t always the right path for every business!), focus on finding a funding provider that fits well with what you’re building (your mission, the pace at which you want to grow and how you want to get there). You are entering into a long-term partnership, so it is essential to ensure that you are prepared for success from the start.

Jason Mahendran is lead investor at Active partners.

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