New ‘hipster’ firm is investing $300m in challenger consumer brands
A new investment firm, which aims to invest $300m (£221m) in smaller consumer goods companies which are challenging giant conglomerates, launched yesterday.
The Craftory, founded by Italian businessman Elio Leoni-Sceti and tech entrepreneur Ernesto Schmitt, is presenting itself as a “hipster” alternative to traditional venture capital (VC) and private equity firms.
Leoni-Sceti and Schmitt have the titles “chief crafter” and “arch crafter” respectively, and the firm declined to release a press release since its target audience “– those fearless CEOs and founders of the worlds boldest challenger brands – wouldnt know what a PR Newswire was if it bit them in the derriere”.
At a time when big-name consumer brands such as House of Fraser, Mothercare and a string of high-street eateries have been struggling, launching a consumer brands-focused investment firm might seem like a risky move.
“These are immensely exciting times for bold, mission-driven entrepreneurs taking aim at big business in consumer goods,” said Leoni-Sceti.
“The tide of history has turned. Consumer preference goes to brands with a story to tell and a genuine purpose to achieve.”
The Craftory offers businesses “permanent capital” raised from high-net-worth individuals, meaning the firm wont be forced to sell the businesses after few years to return cash to investors.
It describes itself as “anti-corporate anti-VC”, since the people running it are hands-on businessmen “as opposed to spreadsheet financiers”.
The Craftory also aims to grow the brands it invests and retain their “mission and purpose”, rather than focusing on “raw profit”.
Behind the deal
Robert Darwin, Hogan Lovells
- Winning the deal wasnt a given for law firm Hogan Lovells, which helped The Craftory launch. It had to pitch against a number of other firms, but partner Darwin said it was “strong chemistry” between the teams that helped them over the line.
- Unique difficulties did crop up along the way, according to Darwin, due to the challenge of “structuring economic and corporate interests in a group with very high profile investors”. He especially credited his firms tax and valuation teams.
- Memorable moments included a particularly long all-day and night negotiation session, where Leoni-Sceti talked until his voice began to fade. “It is the first time I have been at a deal table where an Italian client, with a hoarse Marlon Brando whisper, made the other side an offer he didnt want them to refuse,” Darwin reminisced.
- An “elaborate celebration” is being planned, said Darwin, but first he plans to go out for dinner with his girlfriend and sleep.
Also advising…
- Simon Grimshaw and Tarsis Goncalves, senior associates at Hogan Lovells, particularly enjoyed the complexity of the deal. Hoping for a quick break before the next, Grimshaw will spend time cooking for his wife and young daughter (“results vary!”), while Goncalves will continue wedding preparations while sneaking in a spot of polo.
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