Coming up next month is our annual look at Consumer Goods and Retail, and I’ve been busy interviewing private equity professionals who invest in these sectors. One thing I’ve observed is that E-commerce and technology are playing huge roles in retail today. Both PE and strategic buyers have been making deals in these areas.
E-commerce has been growing for years with consumers demanding more convivence. The pandemic has only accelerated this boom during quarantine, as retailers were forced to close stores. In order to adapt, companies are investing in digital platforms since the trend is not slowing down anytime soon.
Gap has acquired two tech startups in 2021. In October, the company bought Context-Based 4 Casting Ltd. The latter uses artificial intelligence and machine learning that helps retailers improve operations, increase sales and improve customer experience through predictive analytics. And in August, Gap purchased Drapr, an e-commerce startup that allows customers to create 3D avatars and virtually try on clothing.
PE firms are investing in this space too. For example, in September, Francisco Partners bought a majority stake in RugsUSA from Comvest Partners. RugsUSA is an e-commerce provider of area rugs and other home décor products.
If you’re a PE investor who backs consumer and/or retail companies, I’d love to hear your insights on today’s market. You can reach me at: [email protected].
— Demitri Diakantonis