Why Steph Curry, Randi Zuckerberg, and Jessica Seinfeld Invested in This Generic Grocery Store
Who knew toothpaste and Dijon mustard could be so hot.
Brandless, the buzzy online retailer of generic consumer products, has had a star-studded second close of its $35 million Series B round.
The more than 20 A-listers that participated in the second close for friends and family include Steph Curry and Nick “Swaggy P” Young of the Golden State Warriors, talent manager Scooter Braun, author and philanthropist Jessica Seinfeld, Weight Watchers CEO Mindy Grossman, Zuckerberg Media founder Randi Zuckerberg, Color Genomics CMO Katie Jacobs Stanton (and board member of Time Inc., Fortune’s parent company), bareMinerals founder Leslie Blodgett, and social psychologist and Stanford professor Jennifer Aaker—just to name a few.
“They understand our product and mission,” says Brandless co-founder and CEO Tina Sharkey, “but the most important thing is they understand our movement of democratizing access.”
Brandless sells direct-to-consumer through its website more than 250 generic consumer products—from ketchup to toilet paper—that are all that priced at $3. The goods also adhere to certain standards. All of the food items, for example, are non-GMO and more than half carry the organic label. In the health and beauty category, the company doesn’t allow for animal testing or the inclusion of 400 ingredients such as parabens and sulfates.
Sharkey says Brandless is able to charge about 40% less on average for products of the same quality because they are eliminating what the company calls the “brand tax”—the fees that companies have to pay for things like space on supermarket shelves that result in driving up the cost of products.
The Series B, initially announced in July, was led by New Enterprise Associates. Brandless has raised a total of $50 million since Sharkey and her co-founder Ido Leffler started working on the startup in 2014.
Brandless, by tapping into some of the biggest shifts in consumer behavior, has attracted serious attention from both shoppers and investors. Not only is it on-trend with its focus on organic goods, but the direct-to-consumer model is highly coveted for its ability to build relationships with shoppers. For example, Unilever acquired direct-to-consumer Dollar Shave Club for $1 billion in 2016.
Brandless is also benefitting from a challenging time for traditional consumer product companies, which have struggled to adjust to shoppers’ shifting tastes. Sharkey says that of the top 100 retail brands in the space in the U.S. last year, 90 were in decline—what she views as a rejection of the brands shoppers grew up with. That drop, Sharkey says, is part of a larger rejection of “institutions and government, a rejection of over-consumption.”
But Brandless is also aligned with what Sharkey sees as a deeper shift in how people shop. “The fundamental changes in buying and consumption habits were not in sync with the world out there,” she says. “Modern consumption was essentially broken. Brandless, she says, “is redefining what it means to be a brand.”