While Everyone Was Paying Attention Elsewhere…
We put together a slide for our LP meeting that showed well over half a billion dollars in revenue across a handful of consumer companies we backed during the “D2C is dead” era. And it made me think about how often real value gets created in places the narrative machine has already moved on from.
This isn’t really about D2C. It’s about the fact that the industry gets so focused on whatever is hot – AI, LLMs, infra, etc – that we sometimes miss what’s quietly compounding in the background. It’s the frog-in-water problem: the temperature changes slowly, and you don’t notice it until someone shows you the thermometer.
Take crypto. In the U.S., most investors mentally checked out after the last winter. Meanwhile, meaningful adoption kept happening in LatAm, Africa, Southeast Asia and here for every day use cases such as stablecoins, remittances, savings. We’ve just made an investment in this arena too.
Or consumer. Every time the narrative decides consumer is “over,” a new generation of founders quietly builds profitable, capital-efficient businesses with sane margins and loyal customers. You look up a couple years later and realize they’re doing $30M, $60M, $100M in revenue and never made a fuss about it. Many have figured out new channels, lower COGS and new subscription models.
And then there’s something I didn’t expect: our accidental “Cleantech” portfolio. We’ve never branded ourselves as climate investors nor were we looking for them, but I’d say 3 or 4 of our most recent investments are in this domain. None of them lead with “cleantech” in their pitch, but they’re absolutely moving the needle on impact. It just happened quietly – we didn’t even realize it ourselves. 😉
The longer I do this, the more I believe that the interesting value creation is almost always happening in the corners (we call it the “weird and wonderful”) – the sectors everyone stopped paying attention to right before they got good again. But you have to keep your ear to the data and the market to see through the noise of the “hot” categories.
