Today, PAIR Eyewear announces a $12M Series A round.
We met Nathan and Sophia, co-founders of PAIR Eyewear, when they were fresh out of Stanford undergrad. PAIR started as part of a school project — it was clear that this could be bigger, that high quality kid’s eyewear could be fun and affordable. They were young, the business was too, but we quickly came to conviction and anchored their pre-seed round with a $500k investment. On their journey to Series A, they have proven out the investment thesis we dreamed about together in 2018. Here’s why we invested:
Business model innovation unlocks new category dynamics
PAIR is an infinitely customizable eyeglass system that allows customers to self express through their glasses. Since their invention in the 1300s, eyeglasses have been a one-time purchase product. PAIR introduced a new product architecture: Top Frames magnetically attach to your Base Frame eyeglasses so that your glasses can be neon one day, stripes the next. Treating glasses like clothing completely changes the business model in eyewear, from single transaction to a high-repeat, high margin model. Once Pair acquires a user, they can remarket to them with an ever rotating offerings of timely, collectable Top Frames via a limited drop model. This drives customer lifetime value up, increases brand interactions, and keeps the product feeling fun, fresh, and relevant. We love opportunities to redesign user experiences in a customer-centric way, especially when it unlocks business model innovation.
Licensing partnerships provide an unfair advantage with Customer Acquisition Cost (CAC)
If you’re going to grow primarily DTC, you need an unfair competitive advantage with customer acquisition cost. Top Frames provide a unique opportunity to partner with big brands. PAIR’s exclusive licensing partners include brands like the NBA, Marvel and Harry Potter. By partnering with known brands with fanatical followings, PAIR is able to build trust, interest, and ultimately achieve lower CACs than if they were starting from scratch. We talked about the importance of this dynamic with Alex Gurevich of Javelin Partners, who led PAIR’s Series A announced today. He had seen this model at work extremely well with another portfolio company, Master Class, and we both recognized the potential to repeat that playbook at PAIR.
The right timing: DTC adoption curve & ascendance of Gen Z
In 2018, we forecasted that consumer adoption of DTC would continue to accelerate rapidly, especially amongst brands targeting young millennials and Gen Z. PAIR is squarely in this thesis. Today, 50% of Gen Zers consider DTC brands to be more authentic than traditional brands, and their demographic now represents a quarter of the U.S. population. They account for 40% of all consumers and represent more than $44 billion in purchasing power. The pandemic has rapidly accelerated consumer adoption of DTC. The first wave of DTC grew from inexpensive paid ads on instagram. The next will grow based on highly experiential user generated content (UGC) on TikTok (and up-and-coming social networks) where virality is not limited by follower count or ability to spend. This is a much more exciting platform for new entrants who understand it.
Top talent attracts top talent
Nathan and Sophia made a critical hire even prior to raising capital: Lee Zaro, former Head of Product and Sourcing at Warby Parker. We look for founders with the humility to recognize what they don’t know, and with the magnetism and guts to hire exceptional talent around them. By getting Lee on board, it was clear that Nathan and Sophia had both in spades. This was one of the key things that got us excited about backing them as a team prior to business model proof. Even without the numbers to back them, they exhibited these critical qualities that show their willingness to grow.
Working with founders like Nathan and Sophia from company inception is why I get up in the morning. It’s been a real pleasure to support PAIR at the board level, and I have no doubt this is just the beginning.
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