Venture capital firm igniteXL was formed in 2014 to help startups, mostly from Korea, gain a foothold in the U.S. market, said founding partner Claire Chang. While this model has been effective in launching early stage businesses in the United States, a few factors have caused a shift in VC tactics.
First, she said some of the founders were frustrated with the difficulty in finding female investors. Additionally, Chang said she is keen to engage with businesses between the family, friends, and angel investor period and the seed investment period.
With these considerations igniteXL grew into a pre-seed investment firm that focused on investing in the global $ 5,000 billion personal care and wellness marketplace. The VC also focuses on investing in businesses run by women and diverse teams, which Chang says is a path to investment success.
While women make 85% of consumer goods purchasing decisions, only 2.2% of women-led businesses across industries were backed by venture capital in 2019, and that number fell in 2020, Chang said.
“This is a $ 5,000 billion oversight,” Chang said. “Investing in startups led by various actors is not a question of charity. Rather, it’s about seizing an opportunity to support startups whose leadership understands the untapped needs of the market. “
By investing in these companies rarely engaged in venture capital, between the investment of a family friend and angel and the seed investment, Chang said that igniteXL is able to issue checks. small enough for innovative companies.
Many companies igniteXL invests in have either very low valuations or no valuation at all. Looking for promising companies, Chang said they can get involved in the business at low monetary levels before they prove themselves in the market and have valuations in the millions of dollars.
At that time, Chang said that the VC is interested in technology in beauty. She said technologies ranging from product innovations to distribution channels such as social media, live commerce, direct-to-customer sales and subscriptions, as well as personalized consumer engagement and experiences, are growing. more widespread in the field of beauty.
“All of these technologies are pushing access, data, and consumer interactions to the edges of the network,” Chang said. “It creates opportunities for brands big and small to get information, have conversations and generate business with consumers in a more personalized and instant way. “
The VC also wants to harness the $ 140 billion purchasing power of Gen Z consumers, who demand more sustainability, inclusion and transparency. Chang said companies are unable to ignore the demands of these customers and that these concerns affect aspects such as ingredients, manufacturing and packaging.
Considering the roles of technology and young consumers in beauty, and finding promising start-ups led by women and diverse teams, Chang said igniteXL wanted to “find the next L’Oreal, Stitch Fix or NOOM “.