INNOVATION DRIVES FASHION FORWARD

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FEATURE | 7 VENTURE CAPITAL FUNDS IN THE GLOBAL FASHION CONSUMER FIELD TELL YOU HOW TO EMBRACE "OPEN INNOVATION"

August 30,2019

We took stock of 7 venture capital funds of well-known enterprises in the global fashion consumer field and explored the trend of their direct investment. Then, we summarized how they are absorbing a culture of external innovation and embracing open innovation based on strategic cooperation, investment and M&A. Those 7 companies and their venture capital funds are as follows;

  • BOLD by L’Oréal:  French cosmetic giant L’Oréal founded the BOLD venture capital fund in December 2018 with the aim of making minority investments in startups with potentially high growth in marketing, research, innovation, digital, retail, communications, supply chain and packaging, while providing them with professional knowledge, group networking and training guidance.
  • Luxury Ventures by LVMH: French Luxury giant, LVMH, launched its venture capital fund, Luxury Ventures, in 2017 with the aim of creating more value by acquiring minority stakes in iconic emerging brands.
  • Unilever Ventures by Unilever: Unilever Ventures, the venture capital and private equity arm of the European consumer goods giant, Unilever, invests in early-stage promising companies in the areas of personal care, e-commerce and digital transformation.
  • ASICS Ventures Corporation by Asics: Asics, an established Japanese sports brand announced the formation of Asics Ventures Corporation, a venture capital arm headquartered in Kyoto.
  • H&M Co:Lab by H&M: Swedish fast fashion giant, H&M, formed its venture capital H&M Co:Lab in 2014, with an average investment of US$1 million.
  • GreenTech AB by Ikea: IKEA GreenTech AB is a venture capital firm that mainly invests in green technology companies with the aim of improving the sustainability of IKEA's business activities. Funds under management amount to 500 million Swedish kronor (about 60 million euros).
  • Danone Manifesto Ventures by Danone: Founded in late 2016 by Danone, a French food and beverage giant, Danone Manifesto Ventures aims to achieve healthy and sustainable growth based on partnerships with innovative food and beverage companies

New technologies

  • L'Oreal Embrace AI

In December 2018, the L’Oréal group announced BOLD's first investment in Sillages Paris, a French startup offering online services to create customized fragrances based on artificial intelligence and machine learning. It is worth mentioning that, in addition to BOLD’s investment, the L’Oréal group had also invested in Founders Factory, a London based startup accelerator focusing on supporting beauty technology startups in October 2016. In January 2017, the L’Oréal group and Founders Factory jointly invested in five technology startups: InsitU, Preemadonna, Tailify, Veleza and Cosmose. The consistent feature within this group is the use of Internet and mobile technologies to market products.

New Business

  • LVMH sets foot in street sportswear

In February 2018, LVMH Luxury Ventures announced its investment in StadiumGoods.com, a New York-based premier sneaker and streetwear marketplace.

  • Unilever gears up for a new generation of nutrition products

In April 2019, Nutrafol, a fast-growing non-prescription hair health brand, announced $35 million in series B funding. The latest investment round was led by L Catterton, with the participation of an existing investor, Unilever Ventures.  Also in April 2019, Unilever announced that it had signed an agreement to acquire OLLY Nutrition, a premium U.S.-based wellbeing business in the vitamins, minerals, and supplements (VMS) category. In 2018, Unilever acquired a 75% stake in the Italian personal care and wellbeing business, Equilibra. These deals are a sign that Unilever is systematically positioning its nutritional supplement brands to address the health needs of a new generation of consumers.

  • Danone expand its presence in the emerging health food sector

Danone Manifesto Ventures invested in Yooji, a French organic baby food startup in September 2017 and, in November 2017, it invested in Kona Deep, a new brand of deep ocean bottled water naturally rich in electrolytes. Then, in February 2018, Danone Manifesto Ventures invested in Harmless Harvest, a U.S. leader in the Premium Coconut Water Category.

New Customers

  • Unilever aims to attract millennial consumers and Internet consumers 

Unilever led a $3 million seed round of investment in Beauty Bakerie, which was founded in 2011 by Cashmere Nicole. Beauty Bakerie describes its cosmetics as "cruelty-free" and marketed to a millennial customer base. In August 2017, Unilever Ventures invested in a German online cleaning service startup, Helpling. According to Unilever, it is determining how to use the data generated on its platform to reach more consumers on the Internet.

New materials

  • Asics commits to developing new materials and products

In February 2018, the ASICS Ventures Corporation announced that it had invested in the Ai Silk Corporation, a Japanese start-up affiliated with Tohoku University, which develops conductive textiles.

Green and sustainability 

  • Green is the new black! LVMH, H&M, IKEA invest in sustainable industries

In January 2019, LVMH Luxury Ventures took a minority stake in Gabriela Hearst, which focuses on sustainable development in the manufacturing of luxury goods. The clothing of Gabriela Hearst is made from wool sourced from family farms and packaged in 100% biodegradable plastic.

In September 2016, IKEA GreenTech invested in Terramera Inc., a Vancouver-based sustainable agriculture cleantech company that develops sustainable plant-based pest and disease control solutions to serve both conventional and organic farmers.

In October 2017, H&M Co:Lab invested in Re:newcell, a Swedish textile recycling company that uses new technology to dissolve used cotton and other natural fibers into a new biodegradable wood pulp. This can be turned into textile fiber and fed into the textile production cycle, which significantly extends the use of existing human resources.

In November 2017, H&M Co:Lab invested in ADAY, which is a fast-growing direct-to-consumer brand that creates consciously-designed, technical clothing. ADAY's factories in Italy, Portugal and Los Angeles conserve energy by using solar energy, recycled waste and closed-loop energy facilities.

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