Backing the disruptors - True's investment into the men's make-up market

Warpaint is a disruptive men’s make-up brand which we were tracking for almost a year before we invested. We'd identified a brilliant management team and a brand that was one step ahead of consumer behavioural shifts. Although lockdowns across the world were changing consumer behaviour we were confident in our investment case. We take a look at why we chose to invest in founder Danny and his brand despite an uncertain time.

Backing the disruptors - True's investment into the men's make-up market

Insight / 29 May 2020

When we started the turn of a new decade, who could have imagined that less than six months later consumers across the world would have spent more than two months of their lives confined to their own homes. This of course has had unprecedented and unpredicted business consequences, but not all have been for the negative. Here at True we have been investing behind digital-first consumer brands since our first fund launched, and have seen growth in these businesses as consumers look to adapt and make the most of digital businesses during lockdown. There is, of course, much discussion and debate about just how much Covid-19 has accelerated shifts in consumer behaviour, whether it be by 5 years or 10 years we will never know, but the acceleration of digital behaviour is undeniable. Once consumers revert to having full freedom at some point in the future, the question will be which of these changes in behaviour will stand the test of time and where will consumers revert to their old ways. Our view is that for all businesses they will experience a mix of both behaviours, but for those that have seen a boon from Covid-19, successful retention of customers will come to the fore as we move into the new normal.

As investors we are often asked “Are you still investing during the pandemic?” the answer across both our funds is a resounding yes. This is evidenced by our investment into War Paint earlier this month. War Paint is a disruptive men’s make-up brand which we have been tracking for almost a year. Having been in discussion with the brand about an investment when lockdown hit in the UK in March, and as with any challenging period, we reverted to the fundamentals of our investment case. For us one of the largest parts of any successful investment is the management team and our ability to identify and work alongside great entrepreneurs, we believe that Danny Gray the Founder of War Paint is one, of course, with the support of his CEO, Matt Lumb. Having suffered with Body Dysmorphia due to bullying in school, Danny turned to using his sister’s make-up to give him confidence. This put the wheels in motion for him to create an accessible, masculine make up brand specifically targeted at building confidence in men, War Paint was born in 2018.

War Paint, along with many others in our portfolio, operate a successful omni-channel model – and War Paint currently sell their products through John Lewis, Harvey Nichols and Mr Porter as well as their own e-commerce site. Having a strong digital presence and open, real-time dialogue with customers was always at the heart of the business, as Danny grew an engaged community online and drove sales through word of mouth referrals. Given the market nascency in the western world, educative tutorials and user reviews are critical to enable the business to scale and drive mass adoption, and thus have been the centre of their digital strategy historically and will remain so going forward. War Paint have stayed away from the world of influencer-fuelled growth and have instead chosen to build their community around stories from real men who use War Paint to give themselves confidence on a daily basis, as many women would. A strong digital presence enables War Paint to have a two-way dialogue with customers, iterate on product shades and get real time feedback on new product launches, driving innovation quicker than existing market players.

Confidence, and the promotion of confidence, is at the heart of the brand and that is why the business donates a portion of sales to CALM (Campaign Against Living Miserably), to promote the freedom of talking about the burdens that men face and the positive affect that a simple chat can have when you might not be feeling quite yourself. This partnership has become more pivotal during Covid-19 as the pressure on mental health increases, we have seen this first-hand through our investment in Unmind.

Although we do not yet know what the shape of the High Street and retail landscape will look like in the UK, we do know that the team at War Paint have the tenacity and grit to execute on successful partnerships both online and offline. The “growth at any cost” mindset that was rife in VC-backed direct to consumer businesses historically has come to an abrupt halt and we believe this gives a real opportunity for true category disruptors to grow and flourish over the coming decade. Reshaping the world away from the “me too” products with little to no brand equity. Challenging times have consistently been shown to breed opportunity and disruption, we know this time will be no different and we are excited to be backing a brand that will make the most of these shifts.