H Venture Partners brought together more than 75 consumer and retail industry experts to invest in its first fund, raising $10 million aimed at consumer brand startups backed by science.
Founder and Managing Partner Elizabeth Edwards (pictured above) formed the Cincinnati-based venture capital firm in 2017 after 15 years as a VC at other firms, most notably investing in companies, including Peloton, Bill.com, Roots and Freshly.
“Venture capitalists tend to stay away from consumer and science-based investments because they don’t believe consumer brands can be technical,” Edwards said in an interview. “However, you can see all of the technology that goes into lettuce being grown and the packaging technology needed to get it from Point A to Point B without it being spoiled. We love that kind of stuff — where Mother Nature, science and human behavior come together in a consumer brand.”
Check sizes from the fund average $500,000, and H Venture is targeting female founders and founders of color. Edwards says that is in line with statistics showing 85 percent of consumer purchases are made by women, while 93 percent of venture capital is managed by white men. In addition, consumer purchases represent 69 percent of U.S. gross domestic product, but only 3 percent of venture capital investments, she added.
H Venture has already infused capital into 10 companies with a goal toward 15 investments, she said. It looks for the kinds of brands that could be imagined on a store shelf in a retailer, such as Sephora or Target, Edwards added.
A Sephora store shelf, and an aching back, is actually how she found out about CBD brand Prima, started by The Honest Company founder and former Chief Purpose Officer Christopher Gavigan. H Venture co-led Prima’s $9.2 million seed round in May with Defy Partners, Greycroft and Lerer Hippeau.
Edwards said she “became a believer” in Prima, not only because it was a brand she discovered when she needed it, but also the plethora of third-party testing and certifications the company had, as well as Prima’s leveraging of the supply chain and aspirations of being more than a CBD brand.
H Venture’s initial portfolio also includes baby food maker Cerebelly and clean wine company Avaline, founded by Cameron Diaz and Katherine Power.
“Avaline is not a celebrity brand like you would find on social media, but Cameron Diaz wrote two books on clean wines and is passionate about making wine the ‘old world way,’” Edwards said.
Meanwhile, the new fund pulls together a network of founders, entrepreneurs and investors from top consumer and retail companies, half of whom are female, to provide an expertise to startups that Edwards considered unparalleled to Silicon Valley firms. Most of the funds’ backers are people with more than 35 years in the retail and consumer space, running billion-dollar companies.
“The consumer expertise we have is phenomenal; for example, we have the world’s foremost expert on diapers and on baby food,” she said. “He’s not just an investor, he is your board member. H Venture doesn’t claim to be experts in everything, instead we have an incredible network of executives, and helping startups is how they want to spend their time.”