Startups Shift Focus Amid Decline in Consumer Product Investments

Investment in consumer-facing product startups has diminished significantly in recent years, particularly those offering gadgets and giftable goods. This trend appears to stem from a challenging market environment that has made it difficult for many of these ventures to deliver satisfactory returns. Sectors such as fashion, consumer electronics, and direct-to-consumer brands have all felt the impact. Consequently, consumers looking for unique gift ideas may find their choices limited this holiday season.

Despite the overall decline, some startups are still emerging with interesting offerings, particularly in wellness, customization, and apparel. Using data from Crunchbase, we identified 24 companies that received funding this year and have market-ready products. These range from kits aimed at enhancing libido to personal 3-D printers, suggesting there are still avenues for innovation and investment.

Wellness Takes Center Stage

Wellness stands out as a primary focus area for consumer product startups this year. Leading the charge is Oura, known for its smart rings that monitor over 20 biometric metrics to provide personalized health insights. The rings retail for approximately $500, appealing to those seeking to improve their health.

Another significant player is Eight Sleep, which raised $100 million in a Series D funding round this August. The startup offers smart mattresses that adjust temperature and support to enhance sleep quality. Aging-related wellness needs are also being addressed by startups like OneSkin, based in San Francisco. This company specializes in anti-aging skincare and secured $20 million in funding this summer.

For women experiencing menopause, Womaness provides products aimed at addressing related health issues, including libido enhancement and skincare. They are currently promoting a Black Friday sale, emphasizing their “menopause survival” kits.

Customization and Fashion Resilience

Personalized gifts have gained traction, with several newly funded startups offering customized products. Arcade provides an AI-driven platform for designing jewelry and home decor. Once a design is finalized, a network of verified makers brings it to life.

In the beauty sector, Blank Beauty captures customer photos to create custom nail polish, a concept that attracted $6 million in Series A funding this May. For those seeking more extravagant purchases, EufyMake, a crowd-funded startup, allows users to create their own designs with a personal 3-D texture UV printer, available for pre-order at $2,300.

Despite fluctuations in funding, fashion continues to attract investor interest. The most substantial fundraising effort in this area was led by Kim Kardashian‘s Skims, which secured $225 million in a Series D round this month. Another notable mention is Vivrelle, a subscription service for luxury accessories, which raised $62 million this summer and is currently running a Black Friday sale targeting designer handbag enthusiasts.

While venture capitalists have shown a preference for sectors like artificial intelligence, consumer product startups remain a compelling area of interest. Although VCs have largely ignored traditional consumer gadgets this year, they have invested heavily in robotics startups focusing on household products.

For instance, The Bot Co., which aims to develop a robot for household chores, has raised $300 million to date. Similarly, the startup Sunday, backed by Benchmark, recently introduced its first household robot, Memo. With advancements in this sector, these innovations might represent the next wave of popular consumer products in the near future.

Overall, while the consumer products market faces challenges, the emergence of innovative startups indicates that there is still room for growth and development. As the holiday season approaches, consumers may find intriguing options that reflect the changing landscape of gift-giving.