Investing in Rae - Democratizing Wellness
Wellness has been one of the major buzzwords of the decade, and for good reason. The global wellness economy has risen to $4.5 trillion in the last few years, with a 6.4% annual growth rate between 2015 and 2017 alone. The category of personal care, beauty, and anti-aging comprise $1 trillion of the market, making it the number one key sector of the overall global wellness economy. At M13, our investment thesis is predicated on changing consumer behavior, and we’ve kept a close eye on the evolution of the wellness industry. We also recognize that it’s an incredibly saturated space, so we knew any investment in this space would need to be behind a very special team and product.
Enter Rae: a line of affordable, holistic product offerings that is focused on serving the mainstream female consumer. At an affordable price point, Rae is democratizing the wellness beauty space, with products that play at the center of two overlapping industries: beauty and nutritional supplements. Each of these industries are large and growing (with an average 5% compound annual growth rate), and Gen Y + Z consumers are continually seeking cleaner, natural, and multi-purpose products.
Rae is already off to an incredible start. The brand can be purchased at Target stores nationwide and directly from their website.
We’re thrilled to formally announce our investment in Rae and we look forward to working side-by-side with their team to continue to bring fresh, innovative, and affordable products to the wellness and personal care market. I recently had the opportunity to sit down with Rae’s co-founder and CEO Angie Tebbe to discuss why community-building is so important for the brand, their successful partnership with Target, and Rae’s vision for the future.
Rae was started based on the fundamental belief that all people deserve access to affordable wellness. We love that vision because the affordability enables you to reach and help underserved communities and the simplicity of your products enables busy people to integrate wellness as a daily habit. What about Rae are you most excited about?
Rae helps all women shine from the inside out. And to do so, we fundamentally believe in accessibility. Wellness has historically been a category that caters to the 1% and at Rae, we are passionately inclusive; we believe all women deserve great products without the high price tag. Our supplements are pure and powerful – and vegan, gluten-free, non-GMO. They’re free of sugar, artificial preservatives, harmful fillers and colors. And we use ingredients in the dosages that matter – nothing more, nothing less.
Aside from our brand, products and wellness platform, I am most excited by our Rae family – that’s what we call our team. We are a collective of purpose-driven people that live outwardly and vulnerably. We are customer obsessed, and we are not afraid to do the things that are hard to do. We are community-focused and since day one, we have given 5% of our revenue to Girls Inc. to help fuel the next generation of women. Girls Inc. is an incredible organization that fuels the next generation of women by helping girls become strong, smart and bold.
We have all experienced a turbulent and difficult season, but because Rae is based in Minneapolis, the challenges have been particularly compounded by police brutality and the murder of George Floyd. Tell us about Rae’s responses to the community both locally and beyond and how you and the team made those decisions.
Our hearts have been heavy over the last few weeks as our Rae family has been on the ground cleaning up and contributing to rebuilding efforts, sharing resources and support amongst the group, and walking in solidarity through local protests. Also, we are ensuring our local Girls, Inc affiliate has the support they need.
But beyond Minneapolis, the impact has been felt around the world. And while we don’t have all of the answers, we have made a few steps forward to contribute to the movement to end racial injustice. We have compiled a list of suggestions for our team and community as we all self-evaluate and self-reflect on the impact of our individual and collective actions. We’ve been supporting black-owned brands and have compiled a non-exhaustive list for our community as a resource. Additionally, Rae donated $5,000 to the George Floyd Memorial Fund to support his family in the days to come as they seek justice for George. And we immediately donated $50,000 to the NAACP to support the political, educational, social and economic equality of rights in order to eliminate race-based discrimination and ensure the health and well-being of all persons.
We know it's ever more important that we support our community through every channel – whether that be surprising our customers with a free sample of Destress during quarantine (it helps calm your mind and fight mental fatigue) or leveraging our social channels to bring fresh, timely content to our community. At Rae, we listen and learn, and we encourage our community to use their voice in a way that feels right to them. We advocate that every person lives with bold, outward honesty. Because only through the whole truth, can everyone shine from the inside out.
How have consumers responded to Rae? What has surprised you and the team?
Consumers have responded! We are very motivated and humbled by the reaction to our products and the authenticity of our brand. As the journey on Rae began, we knew that there was a need for products that were simple, well-designed, and fit her lifestyle. And we are so glad that our consumer loves the offering, and that we are helping support her wellness journey. We are also excited and encouraged by the advocacy we have seen so early on.
One of the unique things about Rae is our partnership with Target and how that launched the brand. Now you are focusing on growing the brand online. Tell us about that journey and its impacts on other parts of the organization.
It is ever more important that brands embed themselves in the lives of their consumer – and that includes both physical and digital distributions, partnerships, experiences, and content. We knew that as our business model evolved, we would continually learn how to show up to support our customer’s well-being throughout the day.
But as simple as that sounds, it’s complicated. It takes alignment, focus, and a clear roadmap on capabilities for the future. It is a constant balance of data and instincts. And it requires investment in tech to ensure you can leverage data to show up for the consumer across channels. It’s being able to see into the future of what the community wants and expects, but doing the work now.
Angie, you led key divisions at Target for 13 years before co-founding your own company. What are the worst and best parts of being a founder after being a leader in an established and dominant retailer?
It has been almost two years since I took a risk and started my own wellness journey, both personally and professionally. To be successful leading a start-up, you must love the process and be motivated by the challenges and building blocks. Starting a company requires building a team, mobilizing investors, and working through immense uncertainty. You will not always know the answers or get the results you anticipated, and you’ll always wish you had more resources than you do, so you must enjoy and focus on the learning experience. Personally, this has fueled my ability to be a student of both wellness and business together and will continue to push me to a place of growth.
What do you look for in investor partners? What has your experience with M13 been thus far?
As we form relationships with investors and other partners, we look for key identifiers to ensure there is alignment from the beginning. While the “why” and the “what” are important aspects of the business model, culture and values show up as the “how.” And if values are aligned, partnerships soar. It’s also important that we have diversity of every kind supporting the brand, including women at the forefront in the investment space.
Our experience with M13 has been so important to our success as a brand. As we continue to create the roadmap, introduce experiences and think forward, M13 is aligned to our business model and has been incredibly supportive of the entire Rae family.