Fan Bi (buying $5-30M DTC brands) @lifeofbi Twitter profile

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Fan Bi (buying $5-30M DTC brands)

2 months

eCom brand: $10m revenue, 50% gross margins, 25% ad spend, EBIT neutral, flat from LY, $1m in inventory. What does it sell for in 2024?

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 years

Having seen 200+ eCom DTC P&Ls the past year, the best ones look something like: Product Cost - 25% FOB, CC Fees, Shipping/ Fulfilment, Returns, Discounts - 20% >> Gross Margin 55% Marketing (MER) - 20% Opex/ Headcount - 10% >> Net Margin 25%

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

5 months

Apparel brand Something Navy, founded by influencer Arielle Charnas, launched in 2020 with $17.5m of capital at a $45m valuation. It worked; doing $32m of rev in its first year, with plans of a new raise at $100m val. This week it was sold for $1 (and $7.5m of debt assumption).

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

3 months

Canada Goose doing $1.25B in revenue, at 70% gross margins, and 150m EBIT trading at $1.15B market cap is all you need to know about consumer brand valuations right now. Market cap is down 75% since 2019.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 years

Has anyone told you that eCom is a terrible business if you want to make cash? Improving the cash conversion cycle of a brand is priority #1 when we take it over. Here are our four biggest takeaways.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

5 months

Deckers, the $17.5B market cap footwear platform, may be the best consumer investor of the last two decades: - Buys Ugg in 1995 for $15m, now $1.9B in revenue - Buys Teva in 2002 for $60m, now $200m in revenue - Buys Hoka in 2012 for $1m, now $1.3B in revenue

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

7 months

Hello Bello, diaper and baby products brand founded by Kristen Bell + Dax Shepard, doing $180m in revenue just filed for bankruptcy! 🤯 They were backed by VMG, top tier consumer PE fund. In their filing they state there's $100m+ of liabilities, incl $22m to a single supplier.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 years

We see 50 DTC businesses a week between brokered, marketplace, and off-market - it is BRUTAL out there, a storm of five factors with one on the horizon. Please start planning for a bumpy summer.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Bloomberg reported Away luggage has hired a banker to run an exit process. At ~$300M in revenue, what will it sell for? On $200M raised, what does it need to sell for?

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 years

We're about to buy our 8th DTC brand this year, have talked to 200+ founders, and everyone asks about pricing/ valuation. Here's what we've learned:

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 years

Skincare Better, 6 years old, no outside funding, $95M revenue, sells to L’Oréal. No price tag disclosed. No DTC, no marketplace, no wholesale. Distributed through physicians and practitioners within plastic surgery, dermatology and medical spas.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

9 months

Liquid Death preparing a Spring 2024 IPO. It's been on a tear, revenue: 2019 - $3m 2020 - $10m 2021 - $45m 2022 - $130m 2023e -$250m It's raised $200m of equity. Celsius $CELH just posted Q2 revenue of $326m, up 112%! It's guiding $1.3B of 2023 revenues. Market cap $14B.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

6 months

Alo Yoga has hired investment bank Moelis on capital options at a $10b valuation on $1b in revenue. Lululemon $LULU, best-in-class apparel brand of the last 15 years is $51b market cap on ~$9b in revenue.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 years

Although VCs have been leaving DTC land the past couple of years, there's been an explosion in lenders that have entered with billions in capital to deploy. Here's a comprehensive list by type:

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

4 months

Great reporting today from @BoF on DTC brands running an exit process: - True Classic (tees) $207m rev, $19m EBITDA, seeking $1B val - Dagne Dover (bags) ~$100m rev, ~$10m EBITDA, seeking $700m val - Knot Standard (suits) ~$15m rev, breakeven, seeking merger h/t @__rehurek

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

6 months

In a great private equity win, Sweden-based Valedo Partners bought Joe & the Juice in 2013 for $48m and just sold to General Atlantic for $641m. Joe & the Juice was founded in 2002 in Denmark, has 360 stores, does $250m in revenue, and $40m of EBITDA.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 years

After seeing 100+ DTC income statements in the last year and the relative success of those businesses, I think the biggest mistake we've made as DTC operators is mispricing gross margin:

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

It is fascinating that in the hardest category in eCom (apparel), in the most competitive product (tee shirts), there are three $100M revenue brands: True Classic Fresh Clean Tees Cuts Clothing All bootstrapped.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Bloomberg reported Tonal, connected fitness startup, seeking to raise money at $500M valuation. That's less than 6 months after it's $100M raise at a $1.9B valuation, and 24 months after a $250M raise at $1.6B.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

3 months

Rag & Bone is selling to Guess $GES for $56m on ~$250m of revenue. A brand that previously held a premium aesthetic raised a growth round in 2013 from Irving Capital (7 For All Mankind, Aeropostale, Stuart Weitzman), but ultimately wasn’t able to sustain its growth.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

5 months

Coupang (South Korea Amazon) buys Farfetch (luxury marketplace) for $500m, equity and debt holders take a bath. It hit a 2021 peak valuation of $24.9B. Farfetch raised ~$800m in private funding, $850m at it 2018 IPO (at $6.2B). It does $2.5B of marketplace revenue.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

DTC success story breaking soon, homegoods company announcing exit for $1B, ~10x EBITDA.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 years

Someone will buy it for the revenue ... they told me. That's what I thought at my last brand. After 10 years of building, I realized no one was coming. After seeing 100+ deals via our banker network, and participating in 10 ourselves, this is more often what it looks like:

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 years

We've bought 10 businesses in the last year, studied hundreds of transactions, and valuations are truly all over the map, including within the same company! Some data points:

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

8 months

Great to see big wins in consumer startup land. Elf Beauty $ELF ($5.8b market cap) buys Natrium for $355m, on $90m in revenue and $17m in EBITDA. It was founded in 2020. Also, another case study of influencer-led distribution with makeup YouTuber, Susan Yara, as cofounder.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

6 months

Thrasio filing for BK. The aggregator that launched a thousand ships. End of a short but wild era.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

John Foley, Founder/CEO of Peloton, has launched his new rug startup, Ernesta. They raised a $25M Series A in November. Ruggable rumored to be doing $300-400M in sales and very profitable.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

8 months

HeyDude, one of the biggest consumer brand success stories of the last decade. 2018 - $20m 2019 - $56m 2020 - $191m 2021 - $580m, Acquired for $2.5b 2022 - $986m Alessandro Rosano, Italian Founder, now worth $1.4b. Daniele Guidi, US Distributor, $650m.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 years

When Lightspeed and Accel invested $18.5M in Bonobos in 2010, it sent 1,000 ships (of VCs) chasing power law returns in DTC. It hasn't worked. DTC is not SaaS due to a few key factors, most important being revenue quality, and physical goods are incredibly hard to scale vs code.

Ben

@jabbawy

2 years

Genuine question - is anyone buying DTC brands at healthy multiples? Seeing people making investments (I'm one of them). But unlike SAAS, haven't seen a ton of M&A activity btw $50-$250M. At least, not like SAAS. Curious what happens or if cashflow is the optimal path.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

16 days

In the ultimate sign of the consumer markets, SKKY Partners (Kim K and Carlyle vet Jay Sammons) have raised only $121m of their $1-2B target after 18 months fundraising. Sidenote: Kardashian's stake in the firm is held in a vehicle called Favorite Daughter Inc. h/t @__rehurek

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Plastiq, a very commonly used payment app by eCom brands, this week filed for bankruptcy. It allowed you to pay vendors with a credit card and Plastiq would covert to ACH for ~2.5%. Plastiq + Parker, or Plastiq + Slope would add 60-120 days to a cash conversion cycle.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 month

Best in class DTC P&L at <$30m revenue: Product margin - 80% Landed FOB Gross margin - 60% CC fees, shipping, fulfillment, returns Contribution margin - 35% Paid media, influencer, creative EBIT margin - 25% Headcount, tech costs, other opex Agree/disagree?

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Good week of funding for early-stage consumer brands: - True Botanicals, skincare, raises Series B - Mad Rabbit Tattoo raises $10M A - Vacation, sunscreen, raises $6M A - Blank Street, coffee, raises $20M - Matter of Fact, beauty, raises $6M A - Momofuku Goods raises $17.5M A

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 years

Johnny Was, womenswear brand, sells to Oxford, apparel holding company (Tommy Bahama, Lilly Pulitzer) for $270M. $202M revenue, $30M in EBTIDA, i.e. 1.3x revenue, 9x EBITDA.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

9 months

Australian fashion brand, Zimmerman, is getting bought by Advent for $1.15b on $260m in revenue and $78m in EBITDA. It's the third large transaction of a US PE firm of an Australian fashion brand - Summit buying Culture Kings (~$400m) and Princes Polly (~$300m).

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

DTC brands have been punched repeatedly in the face this year and Q1 will be a busy time in Delaware courts.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

All Birds stock down from ~$4B at IPO to $200M, and now getting sued for "misleading IPO" 🤕. The filing states failure to disclose to investors that the brand was overemphasizing non-core products which "have had narrower appeal than expected".

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Canadian DTC mattress leader, Silk and Snow acquired for $24M with additional $20M in 3-year earnout, by Sleep Country, Canadian omnichannel specialty sleep retailer. S&S had revenue of $35M, EBITDA of $4M, i.e. exit multiple of ~5.6x (not including earnout).

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

KPS Capital Partners bought golf brand TaylorMade for $425M, of which $180M was upfront, in 2017. They sold it four years later for $1.7B. How did they drive so much value in four years?

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

GAAP accounting (generally accepted accounting principles) introduced in 1933. 2023, no one in eCom can agree what fits above the gross margin line. Literally every chart of accounts we see looks different.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 months

New Balance doubling sales from $3.3B in revenue in 2020 to $6.5B in 2023 🤯. Big sponsorship wins with Coco Gauff, Kawhi Leonard, Shohei Ohtani. Still owned by Jim Davis who bought it in 1972 with six employees.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 months

Amazing to see great outcomes in DTC, Resident Home, a mattress brand, sells for $1B to Ashley Home Furnishings. The company founded in 2017, raised $10m in early stage tranches, then growth round of $130m in 2021. Resident doing $900m revs, 10% EBITDA.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Hang on, Shopify banks with SVB. $SHOP stock not severely impacted. But likely this will have delays for customer deposits next week?!

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

ClearCo was an early innovator in fast funding for eCom brands and reached a $2B val via $300m of capital in 2021. Since then, it's had two layoffs cutting down from 500 to 150 people, and two CEOs step down. We've been a happy customer and partner. Why is this a hard space?

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

9 days

Interesting nugget from the SKKY filing (Kim K and Carlyle vet Jay Sammons), they invested ~$80m into Truff, maker of truffle-infused hot sauces at ~$250m valuation. Truff's website traffic is ~120k a month, LI shows ~30 employees. Must be very efficient ...

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

This is best in class eCom/ digitally native consumer brand: - $140M revenue, growing 40% YoY, 20% EBITDA margins. - Channel diversified between Amazon, wholesale, DTC. - Supply chain diversified including a portion being vertically integrated with on-shore manufacturing.

Mike Beckham

@mikebeckhamsm

1 year

@sulemanali 100ish last year, maybe 140 this year Amazon is around half that Ebitda margins around 20% this year

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

9 months

Self-tanning sunscreen brand, Bondi Sands, sells to Japanese conglomerate Kao, for $300m on a reported $70m in revenue and $5.5m EBITDA. Bootstrapped and founded in 2012, the Australian brand has included influencers like Kylie Jenner and Emily Ratajkowski.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

3 months

Ruggable had one of the most underreported consumer brand exits of the last five years, selling to Summit Partners for ~$800m. John Foley, Peloton founder, launched his rug startup, Ernesta, ~18 months ago, with $25m from True Ventures. I wonder how it's going.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

5 months

Sovos Brands has been a great roll-up/platform success story: 2017, founded by buying Rao’s and Michael Angelo’s 2018, adds Noosa yogurt 2020, adds Birch Benders 2021, IPOs for $1.3b on $560m revenue, $11m EBITDA 2023, Campbell Soup buys for $2.7B on $878m revenue, $120m EBITDA

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

3 months

Andrew Wilkonson's Tiny has partnered with Andrew Huberman (yes, the podcaster/scientist) to buy and expand Mateina, a Yerba Mate beverage. Long live influence.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 months

18 months after a $250m exit, Ted Baker is filing for bankruptcy. Tough sledding out there.

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 years

Ted Baker, omni-channel, international, lifestyle apparel brand doing $350M but declining profitability sells to ABG (Authentic Brands Group) for $250M.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

9 months

In 2021 L Catterton, the LVMH backed consumer PE fund, and Bernard Arnault (personally) bought a majority of Birkenstock in 2021 for $4.35b. Two years later, they're targeting an IPO price of $8b, on $1.3b of revenue and $430m of EBITDA.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 months

YETI, $YETI, still best-in-class brand, betting on itself with a $300m buyback, ~10% of its float. 2023: $1.65B in rev, up 4% $950m in gross margin, ~57% $225m in EBIT, ~14% Low leverage, only $82m in debt. Cash strong at $440m. Inventory turning fast at only $330m.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

6 months

eCom brands finding it hard to raise a round, you're not alone. eCom funding peaked in 2021 at $5b with 2023 YTD being $130m, a 97% decline. Most of this 2021 was probably Amazon aggregation, but even if you look at the 5 year median of $1B, still down 85%.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Markets and belief: Bonobos 2017 ~$100M revenue, 35 stores, growing ~30% YoY Sells to Walmart for $310M Bonobos 2023 ~$200M revenue, 60 stores, growing ~30% YoY Sells to Express $EXPR and WHP for $75M

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

8 months

Health supplements business, Thorne $THRN, this week was acquired by L Catterton for ~$680m on ~$260m in revenue and ~$35m in adj. EBITDA. The price was a significant premium to where Thorne was trading this year. The business is still growing 30% YoY. h/t @RoOnBrand

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Sundry (DTC apparel brand) bought by Digital Brands $DBGI - Sundry, 12 years old, based in LA, DTC and wholesale, $20M in revenue, $2.5M in EBITDA - Digital Brands, microcap, apparel hold co - $5M in cash (and $20M in equity, not any volume to sell) Congrats to Hil and team.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

5 months

In a successful turnaround, restaurant chain Chuck E. Cheese emerged from Ch 11 three years ago, now doing $1.2B in revenue on ~$200m in EBITDA and looking for a sale for ~$1B. Lenders Monarch and Redan equitized their $705m debt in the bankruptcy and took over the business.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

CPG exit - P&G acquires haircare brand Mielle Organics. Mielle raised $100M+ from Berkshire Partners (growth equity) for minority stake in 2021. Still run by wife-and-husband, founded in 2014, rooted in natural ingredients designed for black women.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

5 months

A history of Golden Goose and PE: 2000 - Founded in Venice, Italy 2015 - Ergon Capital pays ~$130m, on ~$13m EBITDA 2017 - Carlyle pays ~$500m, on ~$155m rev 2020 - Permira pays ~$1.5B, on ~$290m rev, ~$90m EBITDA 2024 - Planned IPO at $3.3B, on ~$600m rev, ~$145m EBITDA

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Olipop on CNBC that it'll do $200M and has received inbound from Pepsi, Coca-Cola. Outdoor Voices at $60M tells Bloomberg it's considering selling itself or raising new funds. Away Luggage announces that it is exploring options. Curious how well this PR/M&A strategy works.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Summit Partners, $42B PE firm, had a thesis around eCom roll-ups and capitalized two platforms: Solo Brands $DTC - Solo Stove, Oru kayak, Chubbies shorts, Isle paddle boards AKA Brands $AKA - next gen fashion brands Culture Kings, Princess Polly, Petal + Pup, MNML

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

How to sell a small market (sub <$10M revenue) DTC brand:

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 months

BowFlex, $BFX, fka Nautilus, gym equipment maker doing ~$300m of revenue with 2021 market cap of ~$1B files for Ch 11 with assets getting sold off for $37.5m

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

There is a crisis in small-market (< $5M rev) DTC brands. They're default zombie, but they don't know it yet.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Hims & Hers, $HIMS, is the only DTC or digitally-native consumer brand that's gone public in the last couple of years that's above it's listing price, and up 81% in the last 6 months. 👏💪📈 Interestingly, it's still getting paid to grow - rev up, not profitable.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 months

Wow, Orangetheory and Anytime Fitness merge to create a $3.5B revenue, 7,000 franchise locations, in 50 countries. Anytime fitness was founded in 2002, Orangetheory in 2010, both are still run by their founders.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

5 months

Amyris partnered with Jonathan Van Ness in 2021 to launch JVN Hair, within a year it had already hit $20m revenue runrate, and held an internal valuation of $500m. Amyris is now bankrupt and the court sold JVN Hair for $1.25m.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Early pioneer of the new age of men's made-to-measure suiting, Indochino is now: - doing $100M+ in revenue and up 40% YoY - EBITDA positive - Fully launched women's suits - 86 own stores - 21 Nordstrom store-in-store The company has raised over $100M.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 months

Oddity, owner of beauty brands Il Makiage and SpoiledChild, is a beast. $509m rev, up 57% $107m aEBITDA $85m FCF $2.58B market cap The co-founders purchased Il Makiage as the platform asset in 2018, then launched SpoiledChild in 2022.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Shopify shut down it's Marketplace for buying and selling brands, ClearCo wound down its version ClearX. Is small market/ lower-mid-market eCom brokerage a good business?

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Blue Apron $APRN was one of the OGs of meal kit delivery. Raised ~$200M in VC before another ~$250M at IPO in 2017 at a $1.9B market cap. Revenue grown 10x in preceding two years to ~$800M. Last week they confirmed a $50M capital injection, and yet still only valued at $41M.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

How do DTC brands preserve maximum cash and reduce inventory risk? It often involves a financing intermediary.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 years

Is there a better VC-backed DTC exit than @rothys in recent times? $140M revenue < 5 years, on $5M of primary capital raised, exiting for $1B to Havaianas parent company.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 months

Gyms have largely the same weights, same machines - $60/month What if you sprinkle in some eucalyptus cold towels, Kiels shower products and provocative brand identity - $300/month. Equinox, the ultimate premium brand. $1B+ revs, $150m+ EBITDA, just secured $1.8B new capital.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

4 months

Chip Wilson and a Chinese group (including ANTA Sports, Tencent) bought Amer Sports (Wilson tennis, Salomon, Arc’teryx) for ~$5B in 2018. They used mostly debt, ~$4B to finance the purchase. They've just announced they're taking Amer public at $10B on ~$3.5B in revenue.

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 months

$10m revenue swimwear brand, over-levered and looking for a bidder for $500k-$1m (which is also around the inventory level), in a creditor clean-up process. Any interest?

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 years

Is ButcherBox the most underrated eCom DTC success story of the last 5 years?

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Fan Bi (buying $5-30M DTC brands)

@lifeofbi

3 months

Express, men's retailer, is doing $1.9B in revenue and has a market cap of $8m (debt of $280m). 😬 It has hired Kirkland Ellis, the #1 bankruptcy firm. Last year it acquired Bonobos via a JV for $75m.

9

1

68

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

eCom rollup, The Hut Group $THG, received buyout offer from PE firm Apollo for ~$1.5B on $2.8B of revenue. Some comps of eCom rollups: AKA Brands $AKA $45M on $600M of rev Solo Brands $DTC $750M on $520M of rev Digital Brands $DBGI $5M on $14M of rev

12

0

67

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

4 months

K18, hair care brand, launches in late 2020 to 25,000 salons, a year later launches in Sephora. By 2022, they’re doing $100m in revenue and receive $25m growth investment from VMG. Last week they were acquired by Unilever, the $120B CPG conglomerate. Oddly, price undisclosed.

5

0

68

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Excited for our friends at Richer Poorer (DTC lifestyle apparel) being acquired by Francesca's, a $200M+ mall-based brand. Good to see strategic exits in the space.

1

3

64

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Seeing a ton of funded eCom zombies. 1. Enough liquidity to survive. 2. Not enough liquidity to invest in growth. 3. Exit value way under equity pref and liabilities.

4

1

65

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

4 months

Talked to a top tier consumer fund and asked if lower-mid-market brands ($25-100m revenue) now only trade on EBITDA multiples of 4-8x, do fund economics still work? "No."

14

1

66

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Markets and consumer sentiment are so volatile, even at scale. Made was doing $500M of revenue, valued at $900M, and just went BK with IP selling for $3M. Touch of Modern doing $120M of revenue, went through BK-lite with assets and IP selling for $7M.

7

4

64

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Fragility of eCom last 3 months: 1. Wholesale growth but then retailers (Nordstrom, Target) cancelling POs last minute leaving brands heavy in inventory and low in cash. Now you have to discount aggressively on your own site to get through Q1.

5

9

63

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

9 months

Mike Repole sold Glaceau (maker of Vitaminwater, Smartwater) for $4.1B, and BODYARMOR for $5.6B, both to Coca-Cola. He has now bought a majority of NOBULL, the cross-fit footwear brand. NOBULL has raised $32m since being founded in 2015, last valued at $500m in 2021.

5

3

65

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Winc DTC wine club: - raised $50M in VC, incl tier one firm Bessemer - raised $5M in crowdfund in two years ago - raised $20M in IPO at $200M market cap a year ago - TTM revenue of $60M Files for BK. Super tough sledding.

9

6

62

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 years

. @SeanEcom started as agency and bought into Ridge, @TaylorHoliday spun out 4x400, @nickjling started Pattern Brands. Seeing other agencies move into brand ownership e.g. @zachmstuck @iamdansnow @thedanielokon . Agencies and brands continue to converge, or is it too distracting?

13

2

64

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

~A year ago: - All Birds, $BIRD, was trading at $1B+ with rev of $300M and growing. - HeyDude was bought by $CROX for $2.5M on rev of $550M. The market did not like this acquisition, and Crocs stock dropped 12% on the news, a drop of ~$1B market cap at the time.

3

4

64

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Scotch & Soda, a Dutch fashion brand, was founded in 1985, and acquired by US private equity firm, Sun Capital, in 2011 for ~$200M. March 1, 2023: Scotch & Soda goes to market for a sale process with $350M 2022 revenue ...

3

5

64

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 months

Two weeks ago Thrasio made their Ch 11 announcement. Since then: Perch ($1B raised) rolled into Razor Cap Hill ($250m raised) rolled into Juvo Berlin Brands ($1B raised) taken over by HPS (private credit) Kite ($200m raised) winds down. All the shoes dropping now.

6

3

65

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

DTC *public market* comps: - One year ago 4x revenue (and 26x EBITDA). - Today they're trading at 1x revenue (and 8x EBITDA) via @GoBainbridge @gardnersmitha

5

8

64

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

10 months

Wow - Affirm $AFRM shutting down Returnly (eCom returns) after $300m acquisition two years ago, chooses Loop Returns as official partner. Big win and congrats on @pomajp and @khency6 .

6

0

63

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 months

Goli apple cider vinegar gummies: 2021 sales of $430m, Jennifer Lopez, Miley Cyrus, Demi Lovato, Alex Rodriguez, and $100m from VMG. 2024 creditor administration (BK-lite) and bought by KPS, Mexican CPG manufacturer.

10

2

63

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

2 months

V1 of DTC was "cut out the middleman" and price direct-to-consumer. This ended up being a really bad advice and likely created billions of dollars of value destruction. The below example sets a product margin (FOB) of 50%. This is not gross margin.

8

4

63

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

10 months

This has been one of the most misunderstood parts of eCommerce the last 10 years. Myself included. Subscale eCom is a terrible way to make money.

Jesse Pujji

@jspujji

10 months

A 7 figure business seems more like a liability than an asset.

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3

42

10

3

62

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Credit in small-market eCom has retreated significantly last 6 months but there are still folks lending new accounts. Revenue Based: Hum Capital Shopify Paperstack Brightflow Wayflyer Supply Chain: Slope Kickfurther Inventory: Dwight Assembled Rosenthal Who else?

25

4

58

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

1 year

Warby Parker $WRBY has been the most referenced VC-backed consumer brand of the last 10 years. It raised ~$550M and today has a market cap of $1.3B. EssilorLuxottica, which owns 1/3 of the eyewear market globally has a market cap of $90B.

9

3

62

Fan Bi (buying $5-30M DTC brands)

@lifeofbi

3 months

Settle, Ampla, 8Fig, Brightflow, Paperstack, Wayflyer, ClearCo, Highbeam, Mercury, Dwight, Assembled, Rosenthal - anyone else doing eCom lending in 2024?

25

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60