20+ VCs Investing in E-commerce and Consumer Products

Angelina Graumann

The investment landscape for e-commerce startups in 2023 is still strong, but it is becoming more competitive. VCs are still investing heavily in the sector, but they are becoming more selective about the startups they back.

There are a few key reasons for this, one of them being the e-commerce market is maturing. The days of easy growth are over, and e-commerce startups need to have a clear path to profitability in order to attract investors.

Also, the e-commerce market is becoming increasingly concentrated. Amazon and Alibaba dominate the global e-commerce market, making it difficult for some new startups to compete.

Despite these challenges, there are still a number of opportunities for e-commerce startups to succeed. Investors are particularly interested in startups that are focused on new and emerging markets, such as social commerce, live commerce, and B2B e-commerce.

Here are some other patterns that are guiding VC investments in this space:

Omnichannel Retail: The fusion of online and offline shopping, omnichannel strategies are pulling in VCs who recognize its value in enhancing customer experiences.

International Expansion: E-commerce success isn’t confined to local shores. VCs are increasingly eyeing startups that have the potential to conquer emerging markets, like Asia and Latin America.

Direct-to-Consumer (D2C) Brands: Pioneering a new era of consumer relationships, D2C brands leverage direct channels to engage customers. The surge of social media marketing and PPC ads has made these brands prime candidates for VC funding.

Subscription Models: Companies like Dollar Shave Club have showcased the allure of recurring revenue. VCs see this stability and flock to e-commerce ventures embracing the subscription approach.

But, beyond trends, what do investors really want?

  • Consistent Growth: A defined strategy showing scalability and robust revenue pathways.
  • Powerful Teams: It’s not just about ideas; it’s about who’s bringing them to life.
  • Market Analysis: Know your space, competitors, and unique selling point.

Evolving E-Commerce: Bridging Offline Discovery with Online Options

General Partner Connie Chan highlights a pivotal shift in the e-commerce landscape: the blend of offline shopping discovery with the vast possibilities of online platforms, facilitated by AI and cutting-edge technology.

Historically, Western e-commerce has been dominated by search-based commerce, where consumers pinpoint their needs and directly purchase. While efficient, this method misses out on the serendipity of discovery. Imagine entering a store for a single item and emerging with several unexpected finds. Brands are now employing AI to emulate this experience online, offering users personalized product suggestions based on past purchases.

Soon, not only will platforms suggest products, but they will tailor recommendations to individual preferences. For instance, suggesting a discounted shirt that matches one’s preferred style and color because data indicates they’re likely to buy it.

The future of e-commerce lies in three phases:

  • Discovery: Platforms such as Temu are leading the way with gamified product feeds. Additionally, social media channels like TikTok and YouTube have popularized product discovery through unboxing videos and testimonials. The key is to recreate the thrill of stumbling upon a new product or deal, just as one might in a physical store.
  • Conversion: After sparking interest, the challenge is converting it into a sale. Bringing offline benefits online is crucial. For instance, ensuring fit without physical trial or chatting with an online sales rep to understand a product better can drive online sales. Live shopping is emerging as a potent tool, offering real-time demonstrations and a sense of urgency (e.g., limited stock availability).
  • Returns & Resale: The final challenge is ensuring the product remains with the consumer. This can be tackled by enhancing the accuracy of product recommendations and providing thorough product information to reduce the likelihood of returns. Furthermore, brands are harnessing AI to predict return patterns and manage inventory. Sustainable shopping is also on the rise, with major brands like Target and Gucci entering the tech-powered resale market, focusing on secondhand shoppers.

The future of e-commerce will harness technology to meld the spontaneity and thrill of offline shopping with the convenience of online platforms. By offering personalized, engaging experiences, retailers aim to increase consumer confidence and decrease wasteful returns.

Shopping via Short Video Apps

The e-commerce landscape is witnessing a transformation, with short video clips becoming its driving force. These clips serve as engaging commercials, linking viewers directly to purchase options. While traditional video monetization in the US, like on YouTube, predominantly depends on ads, this model provides limited revenue for the majority of content creators. A 2018 analysis revealed that a significant 90% of YouTube’s total views were captured by its top 3% creators, yet even their earnings averaged only around $16,800 annually.

However, platforms like TikTok, Instagram, Pinterest, and YouTube are changing this narrative by pioneering native e-commerce through short videos. Such platforms empower creators from varied backgrounds – be it farming, crafts, or fashion design – to connect with and sell directly to their audience. The approach not only transforms video apps into retail hubs but also facilitates instantaneous audience feedback.

Asia, particularly China, is leading this trend. On Taobao, China’s premier e-commerce site, nearly 42% of product pages feature short videos or livestreams. Per a16, these interactive strategies generated sales surpassing $15 billion from January to August 2018, marking an impressive 400% year-over-year growth. As this trend continues, platforms like Amazon are expected to integrate more video content into their product listings.

Here’s how the world of short video e-commerce is unfolding:

  • Direct Farm Sales: Rural farmers in China are leveraging live streams to sell their products directly to consumers, promoting fresher, unique, and direct-from-source produce. A notable example is Ms. Feng, a fruit influencer from Sichuan, known for her “sugar heart” apples.
  • Product Discovery through Videos: Unlike traditional platforms where sales are driven by search optimization, video platforms prioritize entertainment and discovery. This transforms mundane products into viral sensations through innovative demonstrations.
  • Fashion on Video: Fashion influencers on platforms like Douyin turn shopping into an interactive experience, showcasing multiple outfits in brief, engaging videos.
  • Unboxing on Video: These videos capture real-time unboxing experiences, translating the excitement and authenticity of a product reveal into purchase intent.
  • Highlighting Craftsmanship: Video is the perfect medium to illustrate the art behind handcrafted products, letting customers interact and understand the creator’s journey. An example is Wan Shishan, who turned his traditional paper umbrella craft into a significant income source via Douyin.
  • Food as a Brand: Mundane items like instant noodles are being promoted as lifestyle products through innovative short video commercials.
  • Tutorial Videos: From beauty tips to photography tricks, short tutorial videos provide value while promoting related products.
  • AI-Driven Shopping: Platforms like Douyin employ AI to drive spontaneous purchases, making shopping more user-friendly and efficient.

The dominance of ad-based revenue is waning as short video platforms present an enticing alternative for monetization and direct audience engagement. As these apps continue evolving, features like “click to purchase” will become commonplace. With 85% of US millennials admitting to purchasing after watching a video in 2018, this percentage is set to surge with the growth of video-driven e-commerce.

VCs Investing in E-commerce and Marketplaces

FJ Labs

As put by the team at FJ Labs, “Marketplaces are the tool by which we achieve our purpose, the means to our end. We believe in entrepreneurs as solutionists to the world’s greatest challenges and VCs as the means to enabling all the amazing founders addressing the challenges of our time.

At FJ Labs, we believe in human ingenuity and back it with the full weight of our resources and knowhow. This is our ultimate mission and the reason we invest in so many companies.

  • Location: New York, United States
  • About: FJ Labs is a stage-agnostic New York-based investment firm with a global focus. FJ Labs focuses on marketplaces and consumer-facing startups.
  • Thesis: FJ Labs is a stage-agnostic New York-based investment firm with global focus. FJ Labs focuses on marketplaces and consumer facing startups.
  • Investment Stages: Seed, Series A, Series B, Series C, Growth

To learn more about FJ Labs, check out their Visible Connect Profile.

DN Capital

About: DN Capital is a global early-stage venture firm, founded in 2000 and based in London, Berlin and San Francisco. We focus on Seed, Series A and select Series B opportunities in Europe and North America. We believe great tech companies can emerge across any vertical, but we focus our attention on four: Software, Fintech, Marketplaces and Consumer Internet. We have consistently backed category leaders in these verticals such as Shazam, Auto1, HomeToGo, Purplebricks, Endeca and Remitly. We use our extensive global network and financial expertise to give portfolio companies the best possible platform for growth. We are always excited to receive business plans from entrepreneurs seeking capital. So, if you have a business we need to know about, then send us your materials here.

Thesis: We invest in Seed, Series A and growth-stage businesses and can support companies with up to €20m of capital.

  • Location: Menlo Park, California
  • Investment Stages: Pre-Seed, Seed, Series A

To learn more about DN Capital check out their Visible Connect Profile.

Commerce Ventures

About: E-commerce Ventures is a venture capital firm focusing on investments in the e-commerce, retail, FinTech and Insurance sectors.

Thesis: We invest across a range of sub-sectors that we refer to collectively as the Commerce Continuum. These sub-sectors include retail technology, payment technology, banking technology, and insurance technology.

  • Location: San Francisco, California
  • Investment Stages: Seed, Series A, Series B, Growth

To learn more about Commerce Ventures check out their Visible Connect Profile.

Greenoaks

About: Greenoaks is a global internet investment firm that operates in the commercial services, health tech, and B2B sectors.

  • Location: San Francisco, California
  • Investment Stages: Seed, Series A, Series B, Series C, Growth

To learn more about Greenoaks check out their Visible Connect Profile.

Adevinta Ventures

About: Adevinta Ventures is the corporate VC leg within Adevinta (formerly Schibsted Marketplaces)

Thesis: At Adevinta, we believe everything and everyone has a purpose in life. Our portfolio of digital brands unlock the full value in every person, place and thing by creating perfect matches on the world’s most trusted marketplaces.

  • Location: Barcelona, Spain
  • Investment Stages: Seed, Series A, Series B

To learn more about Greenoaks check out their Visible Connect Profile.

Cabra VC

About: Adevinta Ventures is the corporate VC leg within Adevinta (formerly Schibsted Marketplaces)

Thesis: At Adevinta, we believe everything and everyone has a purpose in life. Our portfolio of digital brands unlock the full value in every person, place and thing by creating perfect matches on the world’s most trusted marketplaces.

  • Location: Barcelona, Spain
  • Investment Stages: Seed, Series A, Series B

To learn more about Cabra VC check out their Visible Connect Profile.

Piton Capital

About: Founded in 2010, Piton Capital is a venture capital and growth equity firm headquartered in London and investing in businesses with network effects. We make investments ranging from €200k to €20m and since inception have invested in over 50 businesses, primarily in Europe. Piton focuses exclusively on network effects businesses as this provide one of the few moats or forms of defensibility to achieve dominance.

Thesis: Investing in companies with network effects.

  • Location: London, England, United Kingdom
  • Investment Stages: Series A, Series B, Early Stage

To learn more about Piton Capital check out their Visible Connect Profile.

Dutch Founders Fund

About: The Dutch Founders Fund (DFF) is an early-stage VC that primarily invests in marketplaces and network effects across Europe. Our fund is founded by founders, for founders. We look beyond spreadsheets and resolve early-stage growth-pains with lightning speed. Ready to scale together? Submit your pitch deck to basrieter@dutchfoundersfund.com

  • Location: Amsterdam, Netherlands
  • Investment Stages: Early Stage, Pre-Seed, Seed

To learn more about Dutch Founders Fund check out their Visible Connect Profile.

GGV Capital

As put by their team, “GGV Capital is a global venture capital firm focused on multi-stage, sector-focused investments. Recognizing that the talent to build great companies can come from anywhere, the firm invests in founders building category-leading companies around the world.”

  • Location: Menlo Park, California, United States
  • About: GGV Capital is a multi-stage venture capital firm based in Silicon Valley, Shanghai, and Beijing. We have been partnering with leading technology entrepreneurs for the last 18 years from seed to pre-IPO. With $3.8 billion in capital under management across eight funds, GGV invests in globally minded entrepreneurs in social/internet, commerce/new retail, frontier tech, and enterprise/SaaS. GGV has invested in over 280 companies with more than 30 companies valued at more than $1 billion.
  • Investment Stages: Series A, Series B

To learn more about GGV Capital, check out their Visible Connect Profile.

Kleiner Perkins

As put by the team at Kleiner Perkins, “For five decades we have partnered with intrepid founders to build iconic companies that made history. Today, Kleiner Perkins continues that legacy, investing in founders with bold ideas that span industries and continents, partnering with them from inception to IPO and beyond to maximize the potential of their ideas… and make history.”

  • Location: Menlo Park, California, United States
  • About: Kleiner Perkins is a venture capital firm specializing in investing in early-stage, incubation, and growth companies.
  • Thesis: To be the first call for founders who want to make history and to partner with them as company builders in pursuit of that goal.
  • Investment Stages: Series A, Series B, Growth

To learn more about Kleiner Perkins, check out their Visible Connect Profile.

Lyra Ventures

As put by the team at Lyra Ventures, “We are venture capitalists investing in companies that use innovative technology to reinvent the business of fashion and retail. Our team and network of advisors have deep domain expertise in our industries of focus. We channel this knowledge into each of our investments, working alongside our founders, particularly early on in their company’s lifecycle.”

  • Location: Singapore, SG
  • About: We are venture capitalists investing in companies that use innovative technology to reinvent the business of fashion and retail. Our team and network of advisors have deep domain expertise in our industries of focus. We channel this knowledge into each of our investments, working alongside our founders, particularly early on in their company’s lifecycle.
  • Thesis: We support visionary and disciplined entrepreneurs who are transforming the industries of fashion and retail via the creation of high growth and resilient businesses.
  • Investment Stages: Seed, Series A

To learn more about Lyra Ventures check out their Visible Connect Profile.

14W

As put by the 14W Team, “Founded in 2010, 14W is a global venture capital firm with offices located in New York, London, and Madrid. The firm seeks to invest in the consumer internet, e-commerce, consumer packaged goods, marketplace, and media sectors.”

  • Location: New York, New York, United States
  • About: 14W is a venture capital firm specializing in consumer internet, marketplace, ecommerce, CPG, and media.
  • Investment Stages: Seed

To learn more about 14W check out their Visible Connect Profile.

PayU

  • Location: Poznań, Wielkopolskie, Poland
  • About: PayU is a leading financial services provider in global growth markets. We enable billions of people to buy and sell online.
  • Thesis: One of the leading fintech investors globally, combining the expertise of high growth companies with our own unique local knowledge and technology to ensure that our customers have access to the best financial services.
  • Investment Stages: Seed, Series A, Series B

To learn more about PayU check out their Visible Connect Profile.

Act Venture Capital

As put by the team at Act, “We believe great companies are built by great founders, not investors. We have never been the loudest venture firm. We don’t want to add to the noise of VCs making it about them – it is about the founders and the problems they are trying to solve.”

  • Location: Dublin, Ireland
  • About: ACT is Ireland’s leading independent venture capital company and they have a very experienced and successful investment team. They provide capital to growth-oriented private companies in the range of €750K to €15M. Larger sums can be provided in syndication with their institutional investors. In December 2002, ACT closed its third fund at €170 million. ACT now manages €350 million through a number of venture capital funds.
  • Thesis: Investing in people, markets and technology.
  • Investment Stages: Seed, Series A, Series B, Series C, Growth

To learn more about Act Venture Capital check out their Visible Connect Profile.

Activant Capital

As put by their team, “We typically invest when two things come together. First, the company has the potential to achieve escape velocity and transform an entire industry. Second, we believe the founders can lead the company through hyper growth, and our support can significantly increase the probability of this success.”

  • Location: Connecticut, United States
  • About: Act VC is an early-stage venture capital firm that partners with founders starting out, and established teams scaling their growth. We have raised €487m across multiple funds to support this goal. We look for innovative, category-defining companies in large markets. We help founders build and scale these leveraging the experience of backing over 200 founders before. We work closely with them in this process. Over the past 25 years, we have invested in over 120 companies and built a broad global network.
  • Investment Stages: Series A, Series B, Series C

To learn more about Activant Capital, check out their Visible Connect Profile.

Ascend

  • Location: Washington, United States
  • About: Pre-seed investor in marketplace, e-commerce/D2C, and B2B software startups in the Pacific Northwest.
  • Investment Stages: Pre-Seed

To learn more about Ascend, check out their Visible Connect Profile.

A.Capital

As put by their team, “Unlike traditional VCs, we do not have ownership thresholds. We work with entrepreneurs to determine how much to invest, and at what valuation, based on what their company needs, not based on historical VC financial models. This reduces overall dilution while still leaving room for value-added partners.”

  • Location: Menlo Park, California, United States
  • About: a_capital provides resources and counsel to the creators, inventors and entrepreneurs who are building a new future.
  • Thesis: Investing in consumer and enterprise technology companies.
  • Investment Stages: Seed, Series A, Series B, Series C, Growth

To learn more about A.Capital, check out their Visible Connect Profile.

Lerer Hippeau

As put by their team, “Lerer Hippeau is an early-stage venture capital fund founded and operated in New York City. We invest in good people with great ideas who redefine categories — and create new ones entirely.”

  • Location: New York
  • About: Lerer Hippeau is a seed and early-stage venture capital fund based in New York City.
  • Investment Stages: Lerer Hippeau invests in companies from seed to Series C

To learn more about Lerer Hippeau, check out their Visible Connect Profile.

Tandem Capital

About: Tandem Capital is a seed-stage venture fund and studio helping drive go-to-market innovation. Our studio helps companies craft business strategies, build brands, acquire customers and extend distribution channels. Our dedicated studio team engages deeply with a company’s business, to help find product-market fit and accelerate early growth. The studio provides support primarily to businesses selling products and services directly to individuals, including: connected devices, consumer packaged goods and subscription services.

Thesis: Our fund backs stellar teams whose innovation extends beyond their products into how they acquire their customers, develop their distribution channels and build their overall brands. Tandem leads and co-leads rounds with up to $500K in pre-seed and up to $2M in seed funding. We reserve a significant amount of capital in order to support our founder long-term through follow-on funding.

  • Location: San Mateo, California
  • Investment Stages: Pre-Seed, Seed

To learn more about Tandem Capital check out their Visible Connect Profile.

Additional Resources

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Related resource: 14 FinTech Startups Shaping the Future of Finance

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