Kleiner Perkins’ Investment in Re-Inc Aims to Prove Inclusivity Is Profitable
Four World Cup Champions are making waves in DTC fashion, and demonstrating that doing the right thing is a great business strategy
To say the past 14 months have been a wild ride for members of the US Women’s National Soccer Team would be quite an understatement. Beginning on June 7, 2019 the USWNT kicked off their historic run towards a World Cup Title with a record-breaking 13–0 win over Thailand . A month later, the team hoisted the World Cup Championship Trophy for the fourth time, after defeating the Netherlands in the Final, 2–0. Notably, the 2019 Women’s World Cup brought USWNT co-captain and activist Megan Rapinoe, and her electrifying pink hair, to the front-page of newspapers, magazines, and websites, and making her a household name around the world. After the team’s sensational World Cup Performance which captured the hearts of the nation, the USWNT launched itself deeper into an even bigger challenge: a fight for equal pay. The USWNT filed suit in March 2019 (after the U.S. Men’s National Team failed to qualify for the 2018 World Cup), arguing, in part: “the female players have been consistently paid less money than their male counterparts. This is true even though their performance has been superior to that of the male players.” In May 2020, Federal Judge R. Gary Klausner rejected the team’s argument, pointing to differences in the pay structures of the men’s and women’s contracts. The players’ spokesperson, Molly Levinson, asserted the women would “appeal and press on,” and many expressed frustration with the ruling.
In late 2019, four members of the USWNT took advantage of their momentum, platform, and passion for gender equality to launch their newest venture: Re-Inc, a DTC fashion and lifestyle brand known for its gender-neutral clothing and items. Founded and led by Tobin Heath, Meghan Klingenberg, Christen Press, and Megan Rapinoe, Re-Inc aims to “boldly reimagine the status quo — championing equity, creativity, progress, and art.” Rapinoe mapped out the brand’s importance and timeliness to Vogue: “We felt like the world is moving in a gender-fluid direction, and we’re seeing it too. Fashion is a bit all over the place… and we saw the opportunity to really break through binary gender norms.” In its initial launch, Re-Inc, short for ‘Reimagining Incorporated’, sold out of roughly 1,000 T-shirts in a week, and waiting lists for products soared into the thousands. Subsequent releases include genderless hoodies, sweats, joggers, and accessories, that are constantly sold out, despite the relatively high price point of most items (t-shirts ranging from $60 to $150).
As much of the world reckons with issues surrounding diversity and inclusion, it seems that VC’s acknowledge the opportunity that lies within today’s more inclusive companies and Re-Inc is a compelling case. Kleiner Perkins, perhaps the most famous venture capital firm in Silicon Valley, recently invested an undisclosed amount in Re-Inc. Annie Case, a principal at Kleiner Perkins, leads investments in consumer and healthcare startups for Kleiner Perkins’ newest fund, KP19. Before joining KP, Case worked at Bain, Uber, and also played soccer at Stanford, where she and Christen Press, one of Re-Inc’s co founders, were teammates. She explained how Re-Inc’s unique originality and authenticity stems from the leadership team’s mission, and their demonstrated record of fighting for gender equity and inclusion: “Many brands have built their businesses on being more sexualized or specific to a gender, and for older brands, it’s hard to shift. Companies that are really well-positioned are those who are not having to change or adapt their values. Re-inc is touching on a lot of the themes in reaching [Gen Z] in an authentic way, rather than trying to generate a report on, ‘What does Gen Z value? Let’s go build toward that.’” Though the brand is barely a year old, the founding team’s activism has been documented for years, which, in addition the USWNT’s ongoing fight for equal pay, affords the brand a genuineness that can’t be curated or replicated by larger and more established companies. Rapinoe’s activism, in particular, stands out — she has been incredibly vocal on issues plaguing the LGBTQ+ community, and as openly gay athlete, she bestows a level of credibility to the Re-Inc team in creating a gender-fluid brand. In 2013, she became an ambassador for Athlete Ally, a nonprofit challenging homophobia and transphobia in sports; in 2016, she knelt during the National Anthem in solidarity with NFL player Colin Kaepernick; and last summer, Rapinoe stated she would refuse a visit to the White House should the USWNT win the World Cup, based on Trump’s stance on myriad important issues (her remarks drew the ire of President Donald Trump).
The Business Case for Inclusion
Re-Inc’s emergence comes at a rather opportune time as the past few years have demonstrated a clear surge in ethical and responsible consumerism: younger generations are more socially, politically, and environmentally conscious, and care deeply about their brands speaking up on important issues. A McKinsey study showed 70% of Generation Z consumers try to purchase from brands they consider ethical. Moreover, the Craftory, a “challenger brand” focused VC, estimates that roughly 20 to 30% of consumers heavily consider a brand’s mission and stance on social or political issues, and would rather purchase a more expensive product whose brand aligns with their personal values than a cheaper, more functional one. Diverse and LGBTQ+ millennials have few qualms protesting or even “cancelling” brands that cater to exclusive groups (e.g. Brandy Melville), and have proven their purchasing power in supporting more inclusive companies. VC’s are finally taking notice as the the most nimble consumer brands have positioned themselves ahead of the curve, recognizing that it’s profitable to be ethical. Rihanna’s cosmetics and clothing line, Fenty, which has entrenched itself as a leading brand amongst millennials, featured numerous queer models in a fashion show last Autumn, and Louis Vuitton introduced genderless casting in its SS19 show.
“The most nimble consumer brands have positioned themselves ahead of the curve, recognizing that it’s profitable to ethical.”
The success of brands like Fenty, that tailor their products to consumers of all races, ethnicities, genders, and sexual orientations have exposed how mainstream brands have historically failed to represent certain demographics. Fenty made waves in the cosmetics industry when it rolled out a 40-shade foundation range, earning mass acclaim and proving how many potential consumer had been previously left out of consideration by its competitors. Though well-established companies like Clinique, Olay, and L’Oreal had made efforts to be more inclusive before the Fenty’s rise to prominence, their efforts yielded limited success. In some cases, the brands’ relationships with diverse consumers were only trend based; in others, a lack of diversity at decision-making tables caused products to ring inauthentic and lack quality. Now the household name companies are playing catch-up, trying to penetrate the same markets they had previously misread or ignored. The market for the LGBTQ+ community, for example, is far from niche — it’s large, and skews heavily toward younger generations, presenting a clear business case for investing in companies that represent consumers from that community. Bloomberg estimated the purchasing power of the United States LGBTQ+ community at just under $1 trillion in 2016, rivaling other minority groups, and the demographic is only growing as people feel more comfortable to self-identify. Further, studies show nearly two-thirds of those that identify as LGBTQ+ claim they do not see their lifestyle represented in advertising, suggesting low penetration, and a greater need for both products and marketing.
When Silicon Valley’s biggest and best VC’s are helping nascent consumer brands fill market gaps and build a more equitable world, the future looks promising for underrepresented consumers. One of Re-Inc’s co-founders, Meghan Klingenberg, contextualizes Kleiner Perkins’ investment perfectly: “[It] communicates that everyone — including investors — are ready for change. New leaders and new business concepts.” With heightened focus on the performance of Re-Inc and other inclusive brands, here’s to hoping these companies continue to push the boundaries for inclusivity, and investments in them never compromise their ethics or authenticity.
