Investment Highlight: D2C Underwear Brands 🩲

The underwear industry is a classic David vs. Goliath story, except swap Goliath for a 6-foot tall supermodel with angel wings and add many Davids of varying gender expressions and sizes. Goliath is also Victoria’s Secret, the lingerie company that has built an empire on the small frames of Brazilian models, shilling lace and underwire to the masses and dominating 32% (at its peak) of a global market share worth billions. That market share number has steadily declined in recent years, dropping to 19% in 2020.

                                                        Image: Parade
The reason? Changing appetites for what is sexy and practical are creating huge opportunities for D2C brands. Global VC backing of underwear startups reached $457MM in funding in 2021, as venture capitalists piled into the changing landscape of a staple product. Underwear is good business, with a large market, repeat customers, and low return rates. It’s also easier to make, ship, and advertise, all without a storefront.

Who are the leading companies in this new world of undies? Think Kim Kardashian’s Skims, Rihanna’s Savage X Fenty, and some Gen Z CEOs with their finger on the pulse of cool (Parade). 

Top investors in the space include Lerer Hippeau, Thrive Capital, Stripes, and L Catterton.