Squared Circles, a venture studio, has successfully raised $40 million in Series A funding to launch and scale its own portfolio of health, wellness, and food brands. They differentiate themselves by taking a hands-on approach, leveraging consumer insights and data to identify market gaps, and building brands from conception to Series A funding in-house. This episode offers a unique perspective on a new model for brand creation and scaling in competitive CPG categories.
Key takeaways
Venture studios like Squared Circles are emerging as a powerful model for brand creation, offering a hands-on, deeply involved alternative to traditional incubators or angel investing by building and scaling their own brands from the ground up.
Leverage deep consumer insights and data-driven approaches to identify highly specific market opportunities, such as products tailored for the 'GLP-1 generation' or functional medicine for children, rather than broad categories.
Focus on building brands to a Series A funding stage internally before seeking external investment to maintain greater equity control and demonstrate significant traction.
Prioritize speed-to-market strategies for new product launches, especially in fast-evolving sectors like health and wellness, to capitalize on emerging consumer trends.
Recognize that despite a tightening VC landscape, significant investment appetite remains for specific, high-growth sectors, particularly health and wellness and food and beverage.
Venture studio Squared Circles has lofty plans to launch the next big health, wellness and food products.
The project first began a little over three years ago when Lukas Derksen, who hailed from the creative firm Sid Lee, began angel investing in brands alongside entrepreneurs Alexander Gilkes and Osman Khan. One of its early investments was in the hair wellness brand Nutrafol. They decided to formalize the program into an incubation studio.
Over the years, however, Squared Circles decided to take a more hands-on approach -- instead of acting as an incubator and investor for external brands, the studio is now focused on launching and scaling its own businesses. With that, the company just raised a $40 million Series A led by L Catterton.
"The pitch to the partners that we're building with in the future is: OK, how do we actually build these things all the way to launch -- and even Series A -- without actually giving up necessarily any more of the cap table people?" said co-founder Derksen. He joined the Modern Retail Podcast and spoke about Squared Circle's growth so far.
Currently, Squared Circles has incubated two brands -- cooking oil startup Algae Cooking and skin care company Magic Molecule. It has plans to launch other brands too in spaces like "nutritious food products tailored to the GLP-1 generation" and "delivering functional medicine to children in tasty alternatives," according to its website.
According to Derksen, all of these ideas come from data. "We start very much from a consumer insight place -- and that's something that we strive for every single time," he said.
The focus now is to continue launching new products and getting them ready to market as quickly as possible. Though VC funding isn't as plentiful as it was a few years ago, Derksen said there is still an appetite for certain areas.
"The two categories that have been outspending on disproportionately are health and wellness and food and beverage," he said.
Frequently asked about this episode
What does this episode say about founder & leadership?
Venture studios like Squared Circles are emerging as a powerful model for brand creation, offering a hands-on, deeply involved alternative to traditional incubators or angel investing by building and scaling their own brands from the ground up.
What does this episode say about finance & fundraising?
Leverage deep consumer insights and data-driven approaches to identify highly specific market opportunities, such as products tailored for the 'GLP-1 generation' or functional medicine for children, rather than broad categories.
What does this episode say about brand & content?
Focus on building brands to a Series A funding stage internally before seeking external investment to maintain greater equity control and demonstrate significant traction.
What does this episode say about dtc strategy?
Prioritize speed-to-market strategies for new product launches, especially in fast-evolving sectors like health and wellness, to capitalize on emerging consumer trends.
What does this episode say about founder & leadership?
Recognize that despite a tightening VC landscape, significant investment appetite remains for specific, high-growth sectors, particularly health and wellness and food and beverage.
