Away and Hippo investor Comcast Ventures is starting an incubator in search of the next direct-to-consumer unicorn
Rachel Askinasi/Business Insider
- Comcast Ventures is trying to cash in on the direct-to-consumer boom with a new incubator.
- The investment arm of Comcast Corp. has plans to incubate up to two new companies in the coming year through a new unit called Forecast Labs.
- Its pitch to founders is that Comcast Ventures has partners with startup experience and vast connections across its media company parent.
- It'll have to stand out from all the other incubators that have sprouted up to grow consumer brands, though.
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Comcast Ventures, the 20-year-old investment arm of media giant Comcast Corp., has helped fund unicorns like luggage maker Away and home insurance seller Hippo. Now it's trying to take what it knows about direct-to-consumer startups by starting new companies of its own.
Through a new arm called Forecast Labs, it will provide services to help early-stage companies scale, and also incubate its own new direct-to-consumer brands. The VC arm said it planned to launch up to two brands in the next 12 months.
"We want founders with an idea to come to us," said Arjun Kapur, a partner at Comcast Ventures who leads Forecast Labs.
Comcast Ventures didn't disclose how much funding it'll put into the businesses, but said it would vary based on their needs. For now, it's picking founders based on pre-launch pitches, but may do a more formal pitch day down the road.
Direct-to-consumer incubators are on the rise
The DTC market is booming. Half of US consumers are now buying so-called disrupter brands, according to a recent Interactive Advertising Bureau study.
That demand has given rise to all sorts of incubators for DTC companies, from Amazon to Proctor & Gamble to new companies like Pattern, Tim Armstrong's dtx, and Expa. To win over founders, Comcast Ventures will have to convince them it can offer something others can't.
Comcast Ventures may face a perception with founders that, as a corporate fund, it wouldn't operate at the speed of a startup. Founders also will want to know what terms Comcast Ventures is asking for, since incubators typically take preferred shares or a high amount of equity in a startup, said Nik Sharma, founder of Sharma Brands, which advises DTC companies.
"That's the trade-off," he said.
Comcast Ventures' pitch is that it has the experience and services startups need
Kapur said Comcast Ventures plans to treat each incubation as a custom deal and partner with them for longer than a standard incubator would.
Comcast Ventures' pitch to companies is also that the most important services a startup needs are ones like media buying, marketing, and analytics - services that it can provide through connections it has in the Comcast Corp. universe that includes Xfinity and NBCUniversal.
"Our price advantage on media and ability to provide services as a cost center give us the ability to create something that is truly complementary and additive to the industry at large," Kapur said.
For Comcast Ventures, the bet is that getting involved early on in a company's lifespan will help it grow the company faster, leading to better returns for the investment arm.
Comcast Ventures also touts its experience. More than half the firm's team comes from the startup world, including managing directors Gil Beyda and Dinesh Moorjani. Kapur helped grow companies like HelloFresh, Squarespace, and TheLadders. Half of its portfolio is consumer-aimed startups.
