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Genflow Ventures to invest in 10-15 influencer start-ups this year

Originally written by Timothy Adler on Growth Business

EXCLUSIVE: Genflow Ventures, the VC arm of social media agency Genflow, plans to invest seed money in 10-15 influencer-led start-ups this year. Genflow, whose main business is creating and selling products for its stable of influencer stars, has already made six seed-stage investments in the last couple of months. Although none of the sextet has

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The influencer market is expected to grow from $9bn in 2019 to $15bn in 2022

EXCLUSIVE: Genflow Ventures, the VC arm of social media agency Genflow, plans to invest seed money in 10-15 influencer-led start-ups this year.

Genflow, whose main business is creating and selling products for its stable of influencer stars, has already made six seed-stage investments in the last couple of months.

Although none of the sextet has yet launched, one is a socially conscious BAME beauty product range and another is an eco-conscious online department store.

>See also: How to make your online virtual event a success – 6 top tips

In many ways, Genflow turns the traditional venture capital model on its head. Rather than a start-up approaching a VC with a pitch deck, influencers with followers in the millions canvas their followers as to what products they would like to buy and then Genflow oversees the design and manufacture.

>See also: Five micro-influencers that could boost your business

Chinese influencer agency Ruhnn, which has over 100 influencers on its books, developed the same model before floating on the New York NASDAQ for $125m in 2019 and is currently worth $337m.

Shan Hanif, founder and CEO of Genflow, said: “It’s the next evolution of direct-to-consumer in terms of finding an audience. Most new brands have to find customers, create Facebook ads, etc. but if you launch a direct-to-consumer brand as an influencer it has instant revenue, repeat customers, the lifetime value is higher, and the conversion rate is higher too.

“The whole VC start-up world is doing it wrong. They back a founder who has an idea but there’s no focus on distribution. The whole focus should be on distribution. Without distribution, the whole exercise is pointless.”

The potential market is huge.

Nearly 3bn people use social media worldwide and the influencer market is expected to grow from $9bn in 2019 to $15bn in 2022, according to Genflow.

‘Customer acquisition is the hardest thing in business, and influencers have excelled at it’

Genflow influencers who already have a built-in audience include beauty guru Patricia Bright (2.9m YouTube subscribers), model Sommer Ray (25.3m Instagram followers) and actress Amanda Cerny (25.8m Instagram followers).

To date, Genflow has launched about 70 brands including Anthony Joshua-branded boxing gear and a range for yoga instructor Jessica Olie, including e-books, the digital Align app and a range of yoga products, which together earned the Olie brand £1m in sales this year.

The company plans another 63 product launches in beauty, apparel and active wear this year.

Where the idea came from

Hanif is a former accountant who worked for start-ups including Citymapper. He realised that the hardest thing for most start-ups is finding and audience, and that is where the influencer would come in.

Hanif said. “My idea was that if you had sway over people, the hardest thing to do is building an audience. These influencers were getting thousands of new followers every day. At the same time, influencer agencies were trying to get brands attached to influencers.”

For example, hugely popular online yoga teacher Adriene Mishler has a sponsorship deal with Adidas.

Said Hanif: “Can corporate brands use an influencer? Yes, they can. You’re seeing more and more corporate brands leverage influencers. But only a handful of people in the world can do a sponsorship deal with a Nike or an Adidas. I thought, wait, an influencer can create their own brand. You will always make more money selling your own product.”

Genflow currently has 44 staff based in London and in Los Angeles, where it works with talent agencies.

Its influencers sell between 20,000 and 30,000 products each month, totalling £25m worth of sales over the past four years.

However, influencers can wane just as easily, so what would Hanif say to those who point out that a business based on “How flat does my tummy look?” does not imply longevity?

Said Hanif: “Successful influencers aren’t purely about the number of followers they have but their connection with their audiences. All of Genflow’s clients have organically built a sizeable following due to their passion, creativity and authenticity on their respective platforms. What Genflow does is help monetise their followings and convert them into paying customers, which is where the long-term business creation comes into play. Customer acquisition is the hardest thing in business, and influencers have excelled at it.”

Further reading

What is CRM and what does it do? Best CRM software for mid-sized businesses

Source: https://www.growthbusiness.co.uk/genflow-ventures-to-invest-in-10-15-influencer-start-ups-this-year-2557841/

Private Equity

Boston startups expand region’s venture capital footprint

This year has shaken up venture capital, turning a hot early start to 2020 into a glacial period permeated with fear during the early days of COVID-19. That ice quickly melted as venture capitalists discovered that demand for software and other services that startups provide was accelerating, pushing many young tech companies back into growth […]

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This year has shaken up venture capital, turning a hot early start to 2020 into a glacial period permeated with fear during the early days of COVID-19. That ice quickly melted as venture capitalists discovered that demand for software and other services that startups provide was accelerating, pushing many young tech companies back into growth mode, and investors back into the check-writing arena.

Boston has been an exemplar of the trend, with early pandemic caution dissolving into rapid-fire dealmaking as summer rolled into fall.

We collated new data that underscores the trend, showing that Boston’s third quarter looks very solid compared to its peer groups, and leads greater New England’s share of American venture capital higher during the three-month period.

For our October look at Boston and its startup scene, let’s get into the data and then understand how a new cohort of founders is cropping up among the city’s educational network.

A strong Q3, a strong 2020

Boston’s third quarter was strong, effectively matching the capital raised in New York City during the three-month period. As we head into the fourth quarter, it appears that the silver medal in American startup ecosystems is up for grabs based on what happens in Q4.

Boston could start 2021 as the number-two place to raise venture capital in the country. Or New York City could pip it at the finish line. Let’s check the numbers.

According to PitchBook data shared with TechCrunch, the metro Boston area raised $4.34 billion in venture capital during the third quarter. New York City and its metro area managed $4.45 billion during the same time period, an effective tie. Los Angeles and its own metro area managed just $3.90 billion.

In 2020 the numbers tilt in Boston’s favor, with the city and surrounding area collecting $12.83 billion in venture capital. New York City came in second through Q3, with $12.30 billion in venture capital. Los Angeles was a distant third at $8.66 billion for the year through Q3.

Source: https://techcrunch.com/2020/10/23/boston-startups-expand-regions-venture-capital-footprint/

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Private Equity

Alternative Investments/Real Estate: Housing Market Demand Is “Insane”

Speaking to CNBC on Power Lunch, Glenn Kelman, CEO of real estate brokerage Redfin (NASDAQ: RDFN), said he expected the current boom conditions in the housing market to last well into next year. He attributed the high demand to affluent professionals looking for remote homes as well as low interest rates. Also, he thinks some sellers will put their properties on the market only after the presidential election.

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Alternative Investments/Real Estate: Housing Market Demand Is “Insane”

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Redfin CEO Glenn Kelman says the boom could last into next year.

Speaking to CNBC on Power Lunch, Glenn Kelman, CEO of real estate brokerage Redfin (NASDAQ: RDFN), said he expected the current boom conditions in the housing market to last well into next year. He attributed the high demand to affluent professionals looking for remote homes as well as low interest rates. Also, he thinks some sellers will put their properties on the market only after the presidential election. (CNBC)

Kelman: Too good to last forever

“This level of demand is absolutely insane. I would expect it to last into 2021, at least,” Kelman said.

Recent data from the National Association of Realtors shows up the strength in the housing market.

Existing home sales shot up 9.4% in September beating expectations. Even though the median purchase price of a home rose approximately 15% year over year, there is just a 2.7-month supply of for-sale homes, showing tight market inventory conditions.

The 30-year fixed-rate mortgage averaged 2.80% for the week ending Oct. 22, down from 2.81% in the previous week and 3.75% a year ago, according to the Freddie Mac Primary Mortgage Market Survey. Therefore, mortgage rates crept even lower in the latest week.

However, “there’s no way it can last forever,” Kelman warned of the bullish conditions.

Canada: Off the charts

Meanwhile, at the northern neighbor, home sales activity in September is described as “off-the-charts.”

Housing data released by the Canadian Real Estate Association (CREA) last week showed a nationwide year-over-year increase in sales of 45.6%.

This was a new all-time monthly record for the third month in a row.

“This is starting to sound like a broken record (about records being broken), but Canadian home sales and prices set records once again in September … as they did in July and August,” said Shaun Cathcart, senior economist at CREA, in a statement.

Real Estate ETFs in the U.S.

The year-to-date performance of some real estate ETFs is shown below:

iShares U.S. Home Construction ETF (ITB)              +24.61%

SPDR S&P Homebuilders ETF (XHB)                          +20.83%

Vanguard Real Estate Index Fund ETF                      -13.91%

It may be noted that despite the boom conditions in housing, real estate ETFs and stocks have declined in recent days.

According to Barron’s, this may be due to yields on the 10-year and 30-year Treasuries moving higher in recent weeks.

Other reasons could be fears of inflation ticking up in the future amidst an improving economic situation.

Nevertheless, the view is that interest rates are likely to remain low for longer. So demand may remain strong.

“Part of what is fueling this boom is that the economy has just split into two and rich people are able to access capital almost for free, so, of course, they’re going to use that money to buy homes,” said Redfin’s Kelman.

Related Story:   Mortgage Rates Set Another Record Low; Real Estate ETFs Could Benefit

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Source: https://dailyalts.com/alternative-investments-real-estate-housing-market-demand-is-insane/

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Private Equity

Asda’s new owner EG Group seeks new leadership ahead of IPO – report

EG Group is owned by the billionaire Issa brothers and the private equity firm TDR Capital, who teamed up for a £6.8 billion takeover of Asda last month

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UK grocer Asda Group’s new owner EG Group is looking for a new chairman and independent directors as it prepares for a £10bn initial public offering, The Timesreports.

EG Group is owned by the billionaire Issa brothers and the private equity firm TDR Capital, who teamed up for a £6.8 billion takeover of Asda last month.

The move comes after Deloitte resigned last week as the company’s auditor because of concerns over the group’s governance and lack of internal controls, according to the publication.

A decision on candidates will be taken before the end of this year, although roles haven’t been finalised yet as the company is in the process of deciding whether to float in the UK or the US, The Times reports.

Write to Barcelona editors at barcelonaeditors@dowjones.com

From Dow Jones Newswires

Source: https://www.penews.com/articles/asdas-new-owner-eg-group-seeks-new-leadership-ahead-of-ipo-reports-20201023

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