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Greycroft co-founder and managing director Alan Patricof.
- Venture capitalists have poured roughly $4 billion into direct-to-consumer companies they think are cashing in on relevant trends with unique perspectives and could appeal to large swaths of audiences.
- Investors such as Greycroft's Alan Patricof, Science's Peter Pham, and former Google and Oath exec Tim Armstrong are backing DTC startups like Dirty Lemon and Liquid Death.
- Business Insider asked 15 investors which DTC startups they think will blow up this year and why (most picked companies they've invested in). Beverages and healthcare are popular categories.
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Many consumer products categories face attacks from direct-to-consumer upstarts that have upended everything from how we sleep (Casper) to how we buy glasses (Warby Parker).
Fueling this disruption are not just these DTC brands, with their data and direct consumer connections, but venture capitalist funding that would have typically been reserved for tech startups.
Estimates vary, but consumer brands have raised more than $3 billion since 2012, with about half of that being raised in 2018 alone, according to CB Insights data cited by Digiday; and DTC brands have raised roughly $4 billion in VC funding, according to Randy Yang, senior director and head of corporate development of digital consumer brands at Walmart eCommerce.
Investors are backing companies they think are cashing in on big trends with unique perspectives and the ability to appeal to big audiences. Take the beverage category, where companies like Bev, Dirty Lemon, and Haus are creating healthy alternatives to sugary drinks. Some are betting on companies that are trying to tackle new categories, as Modern Fertility is doing with women's health.
Business Insider asked 15 investors which DTC startups they think will blow up this year and why (most picked companies they've invested in).
Here are their picks, in alphabetical order: