Comcast Ventures, the 20-year-old investment arm of the media giant Comcast Corp., has helped fund unicorns like the luggage maker Away and the home-insurance seller Hippo. Now it's trying to take what it knows about direct-to-consumer (DTC) 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 direct-to-consumer brands. The venture-capital 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," Arjun Kapur, a partner at Comcast Ventures who leads Forecast Labs, said.
Comcast Ventures didn't disclose how much funding it would put into the businesses but said it would vary based on their needs. For now, it's picking founders based on prelaunch 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 planned 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 Ladders. Half of its portfolio is consumer-directed startups.