Our investment in Atelier: the AWS for product development
We are excited to announce our recent follow on investment in Atelier’s recent $3 million Seed funding round, alongside some of Australia’s leading consumer investors. Atelier is a B2B managed marketplace that streamlines manufacturing, logistics and packaging to enable creators and brands to produce any beauty, health or wellness product at-scale and on-demand in one-third of the time, and at a substantially lower cost than traditional contract manufacturing. We first backed the Atelier team in their pre- seed round in December 2020.
Atelier’s marketplace model streamlines and manages the end-to-end process, from manufacture, to logistics and packaging, behind building a new product line. They work with many direct to consumer (D2C) brands, including influencers building brands and existing brands wanting to trial a low-risk product line. In the last 12 months, they have seen 4x revenue growth and doubled the number of customers on their platform — achieved with zero marketing to date and most new customers acquired through word of mouth.
There are three ways we see Atelier is set up to win:
1. 3x quicker time to market for new product development. By consolidating all supply-side functions down to just one ‘managed marketplace’ from what is usually over six channels, Atelier reduces the product development lifecycle from 12 to18 months down to just three months.
2. Smaller minimum order volume to allow creators to ‘test and learn’. When building a software business, ‘test and learn’ is paramount. However for product development this has never been possible. Unlike contract manufacturers that have long lead times and inaccessible minimum order quantities, Atelier aggregates the back end to allow the brands and creators on the platform to place small first orders to test the product lines before rolling out.
3. Reduced cost to a build a product line. Atelier allows brands to samples and order small quantities, which significantly reduces the cost to set up and launch a brand. We believe that this will continue to expand the market and allow creators more opportunities to monetise their own distribution channels.
A leading team, founded by a serial entrepreneur and an industry expert
Nick Benson, CEO and co-founder of Atelier, experienced this problem first-hand as he launched and managed his own men’s skincare brand over the years. He found that it would typically take 12 to 18 months to build a new product line, with minimum order requirements of at least 60,000 units per SKU.
Nick Benson teamed up with his co-founder, Nick Hudson, who is now COO of Atelier and is ex-Yieldify, and Google. Prior to joining Atelie, Nick was the APAC director of e-commerce tech company Yieldify where he ran the local office to achieve 3x revenue growth in two years.
The OIF team have had the pleasure of working with the Atelier team for the past year, and as we have learnt more about the team, their ability to execute and capture the opportunity, we are increasingly confident that they can continue to execute and build a significant and well-loved business. Learning first-hand the pain points that many creators, influencers and brand builders face when trying to develop, create and launch products, and the team at Atelier have build a great business off the back of that experience.
We continue to feel very privileged to partner with the two Nicks and the Atelier team on their mission to build the platform to create any beauty, health or wellness product at-scale and on demand.
The white-hot creator economy
Atelier is more than a ‘marketplace’, with the bold ambition to be a worldwide ‘creator hub’. It’s compelling value proposition centres on lowering the entry cost and cost of failure for creators in a scalable way by providing them with the tools and necessary infrastructure to launch and ramp up their product lines as demand takes off.
We are seeing a fundamental shift in the creator economy, from influencers and creators being paid for promoting third party brands, to a world where creators are realising the true value of their ‘internal brands’ and as a result focusing on how to build a sustainable brand and product line themselves.
Today, the total size of the creator economy — the industry of influencers, bloggers, videographers, and essentially anyone on social media monetising their online presence — is estimated at US$100 billion, with over 50 million professional and amateur content creators around the world.
As a relatively new space, the future opportunity is imaginably, much larger. It is predicted that with more investment and increased innovation in the space, the creator economy will experience a growth rate to the same magnitude to that of the ‘gig economy’ and reach a trillion-dollar valuation over the next couple of years. Already, we’ve seen global VCs invest US$850m into creator-focused start-ups since October 2020.
Strong market opportunity for D2C products in beauty, health and lifestyle
Initially, Atelier plans to focus on the beauty, wellness, pet care and household cleaning verticals. This is a huge global market that we believe is upwards of US$100 billion and is continuing to expand rapidly.
Atelier is continuously evolving
Atelier will use this injection of capital to build out their managed technology platform and have plans to create further value for their customers along their product journey. Atelier’s vision is to move towards a marketplace model that will give customers complete autonomy and transparency over their supply chain. This will allow creators to order a test product immediately, by selecting their product packaging and design in a ‘self-serve’ way and automate the re-ordering process.
An exciting and enduring partnership
We could not be prouder to continue to partner with Nick Benson, Nick Hudson and the awesome Atelier team on their mission to ensure creators have more agency in the way they can launch and scale their product lines.
Given their astounding track record and what they’ve managed to achieve in just a short time, we are confident that they will continue to succeed!
If you’re a creator interested in learning more about how Atelier could help you develop, build and launch your product, reach out to the team, you’ll be wowed!
If you’re interested in what Atelier are creating and want to be part of an incredible team, make sure you check out their open roles and apply today.
OIF Ventures is a leading Australian venture capital firm that champions exceptional founders, driven by purpose, who add material value to their customers, markets, and communities. OIF Ventures invests in early-stage companies with innovative, high-growth and disruptive technologies with demonstrated market demand.
Founded in 2016 by a team of founders, entrepreneurs, and business-builders, OIF Ventures has raised two funds to date, managing over $300 million and closing its upsized Fund II in mid-2021 for over $115 million. OIF Ventures is exclusively backed by founders, business-builders, ASX executives, HNW and family offices. While focused on backing Australian founders, OIF Ventures seeks to partner with ambitious founders who have the opportunity to expand into global markets, in particular the US, where we can support this expansion through our extensive network of potential customers and investors.
The OIF Ventures team have backed some of Australia’s leading emerging technology companies including Go1, Instaclustr, Assignar, Enboarder, Kasada, Circle In, Adventus.io, Clear Dynamics and more.