Home Venture Capital The search for better unit economics prompts consumer tech investors to shift...

The search for better unit economics prompts consumer tech investors to shift focus

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A slew of consumer tech and companies focused on consumer packaged goods (CPG) have gobbled up venture capital in the past year. Keychain, Harmonya, Highlight, Ramani, SupplyPike, Vividly and Turing Labs, just to name a few, captured investor attention for their technologies.

Companies weren’t the only ones getting funding. Investor firms focused on consumer and CPG were, too. That includes VMG Catalyst, Alethia and Humble Growth.

Traditional CPG products have had their moments. However, these companies in and of themselves aren’t necessarily VC worthy. That’s because consumers’ tastes constantly change, grocery shelf space is finite and e-commerce takes finesse to cut through the noise. Many of the capital-worthy companies mentioned above fall more into the category of enablement: helping CPGs be better businesses.

But why are investors so interested in consumer tech and CPG as an opportunity now?

Some of that is most likely excitement around artificial intelligence, which Dana Kim, co-founder and CEO of Highlight, noticed while going after Series A funding for her product testing startup.

“A surprising question that we got throughout the fundraising process was, ‘What role does AI play in your organization?’” Kim told TechCrunch+. “What gave folks a lot of comfort was that Highlight was not being disrupted overnight by some sort of generative AI application at the end of the day. Oreo is going to need to know whether Oreo A or Oreo B tastes better, and that’s not something that generative AI can spit out. In the face of disruptive technology, having really solid data was key.”

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