The DTC mattress sector was one of the hottest categories in venture capital between 2016 and 2020. Then it became one of the most reliable ways to incinerate investor capital in retail history.

Casper IPO'd at a heavily cut $575M valuation, never turned a profit, and was taken private at a massive discount. Purple went the SPAC route and saw its peak value erased. Eve Sleep in the UK collapsed into administration.

Koala just listed on the ASX. A$332M in revenue. A$12.3M in net profit. ~A$300M market cap.

Casper launched in New York in 2014 with $240M+ in venture capital and an explicit mandate to dominate the US market as fast as possible. Koala launched in coastal Byron Bay in 2015 with a completely different set of structural constraints and a fraction of the capital. The category was the same. The capital structure and discipline were not.

The comparison that matters: Koala allocates ~$69M in marketing against $332M in revenue, roughly 20% on customer acquisition. That's the exact same ratio as Casper. The difference is that Koala's 64% gross margins allow them to absorb that acquisition cost and remain profitable. Casper's margins couldn't. That's not a marketing problem. That's a unit economics problem that no amount of venture capital could fix.

The DTC mattress category wasn't dead. The over-capitalized, low-margin version of it was. Koala survived by building the version that could actually generate profit.

Stock is down ~20% since listing, so the market will take some convincing. But a profitable DTC furniture business built from Byron Bay to Japan, the UK, and the US is not what anyone was predicting when Casper filed for bankruptcy in 2022.

Thrasio raised $3B. Touched a $10B valuation. Filed for bankruptcy in February 2024. The Amazon aggregator model, buy hundreds of brands, scale centrally, go public, collapsed under its own weight.

Inside that bankruptcy was a stain remover brand called Miss Mouth's Messy Eater.

Thrasio had acquired it in 2020 for ~$10M. Originally called Frosty Dream Inc., selling stain products under names like Road Spill and Emergency Stain Rescue. It survived the bankruptcy. Kept growing. Expanded to Target. Hit #1 on Amazon with 90,000+ reviews, fueled by parent creators on TikTok filming themselves removing impossible stains from kids' clothes.

Church & Dwight just paid $325M for it. $80M in revenue. $28M in EBITDA. 35% EBITDA margins. 4.1x sales. 11.6x EBITDA. A 30x+ return on the original acquisition price.

Church & Dwight has now done this twice with the same explicit formula:

2022: Hero Cosmetics. Amazon-native pimple patch brand. Founded 2017 with one product. $115M revenue. 40% EBITDA margins. $630M acquisition at 5.5x revenue and 14x EBITDA.

2026: Miss Mouth's. Amazon-native stain remover. $80M revenue. 35% EBITDA margins. $325M acquisition at 4.1x revenue and 11.6x EBITDA.

The stated formula: #1 brand in a proven category. Asset-light. Strong margins. Gross margin accretive. Can leverage Church & Dwight's global sales, distribution, and operations platforms.

Miss Mouth's was written off inside a $3B bankruptcy. The product kept moving off the shelf anyway. The brand that the aggregator model couldn't save, a strategic acquirer paid $325M for. An investing lesson as old as time: there's more alpha in growth than value, and the market frequently misprices both.

Tillys' stock surged over 60% in a single trading session. It's not a meme stock. It wasn't Reddit retail traders.

Tillys is a 229-store teen specialty retailer, mall-based, skate-culture positioning, $550M+ in revenue. Like many mall-based retailers, the market had been pricing it for death. Then Q4 arrived. Revenue up 5%. First profitable quarter since 2021. Comp store sales jumped 10% while the brand closed 17 underperforming stores. Gross margins expanded from 26% to 33%. The stock got short-squeezed.

The turnaround has been architected by lifestyle veteran and former Navy SEAL Nate Smith. His first major move: partnering with influencer Loren Gray, 55M+ TikTok followers, to anchor a complete brand repositioning. He coupled that by building TikTok Shop so aggressively that by April 2026, TikTok Shop order volume was beating Amazon's for the brand.

Teen specialty retail remains one of the most volatile categories in commerce, a graveyard filled with Hot Topic, Wet Seal, dELiA*s, Aéropostale, and Forever 21. Full, sustained profitability will require consistent same-store sales growth in a category that punishes inconsistency severely.

But the Abercrombie & Fitch story is worth noting. A deeply distressed, widely dismissed mall retailer that transformed into one of the greatest retail stock turnarounds of the decade by leaning heavily into digital distribution pivots and proprietary product mixes. At ~$135M market cap against $550M+ in revenue, the broader market still isn't convinced. The short sellers who priced Tillys for death just got squeezed. Whether the bulls are right about the multi-year recovery is the more interesting question.

Florian Wojewodzki invests in European health, wellness, and better-for-you brands at a fund that describes itself, without apology, as brand junkies. It's a prerequisite to join. You have to care about brand the way most investors care about unit economics, obsessively, instinctively, before the numbers give you permission to.

The thesis: three things have to be true for a consumer brand to win, product, brand, and community. Florian calls it the holy trinity. Miss any one of them and the other two can't save you.

What makes Iris different is where they start. Most funds meet a brand and decide whether to invest. Iris builds a view on a category before it ever meets a company. By the time a founder walks into a meeting, Iris already knows what the white space looks like, who the competitors are, and what a winning brand in that space needs to feel like.

The portfolio reflects it. Biomel, a pre-probiotic gut health brand with an almost instant feedback loop that removes the biggest barrier to supplement adoption: you feel it working. Superlativa, a clinically-backed cortisol management brand out of Spain built around a problem that is vastly underserved and vastly underestimated. Maurten, an endurance nutrition brand out of Gothenburg with one of the most fanatical communities in sport, cyclists, triathletes, and runners who don't just use the product, they evangelize it.

Three things from the conversation worth taking with you:

The best time to reach out to a fund like Iris is long before you're ready to raise. Five years of relationship-building before a check is written isn't unusual for them, it's the model. The founders who understand this build the relationship before they need it.

They think about brand before it's measurable. Most investors wait for the metrics to give them permission. Iris builds a category thesis first, then looks for the brand that fits it. That inversion is what allows them to move early.

What's driving the next wave of health and wellness innovation in Europe. Worth listening for the specific categories Florian is watching, the European market runs the adoption curve differently from the US, and the patterns are instructive.

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Design-led DTC platform with a category-defining hero franchise, distinctive brand IP, and a loyal repeat customer base.

8-year-old design-led DTC brand with a category-defining hero franchise, unmistakable brand IP, and a genuinely loyal repeat base.
- ~$6M revenue, ~75% DTC, ~20% contribution margin
- Hero franchise = 63% of revenue at 70% product margin - 4.9★ average reviews across DTC and marketplaces
- 35% repeat customer rate
- 431K organic community across IG, TikTok, and email

FY26 reflects deliberate steps to rationalize lower-margin wholesale and moderate paid acquisition, protecting full-price discipline.

The business is not yet consistently profitable. The opportunity for the right owner is one of two clear paths: re-accelerate paid and creative spend on a brand with real cultural equity, or rebuild the wholesale book with discipline. Both are achievable; neither requires building from zero.

Email: [email protected]

A flour mill built in 1890 just closed permanently. The Omaha North mill survived the Dust Bowl. Two World Wars. The Great Depression. Atkins. Gluten-free. Keto. It didn't survive GLP-1 and MAHA arriving at the same time.

Ardent Mills, North America's largest flour miller, has closed six mills in recent years. The most recent two, Omaha North and York Pennsylvania, permanently shuttered in January 2026. From their CEO: "US flour production has officially dropped to its lowest overall level since 2011, and per capita consumption has hit a 25-year low."

US flour consumption per capita is down nearly 20 pounds since the turn of the century. On 330 million people, that's 6.6 billion fewer pounds of flour consumed annually than in 2000. MAHA is driving consumers away from flour-based foods on ideological grounds: ultra-processed, refined carbohydrates, industrial ingredients. GLP-1 is driving caloric reduction across every category. Ardent Mills' own data: 7% of US adults on GLP-1 medications, another 32% considering it. Nielsen estimates GLP-1 users consume 700 fewer calories per day.

The market was right about this one. The structural decline is real. But what Ardent Mills is doing about it is worth paying attention to, and something CPG brands could learn from. They're pivoting from refined white flour toward chickpea flour, lentil flour, sorghum, and whole grain functional ingredients, explicitly marketed as GLP-1 friendly. UltraGrain whole wheat flour repositioned as fiber-forward. Chickpea snack applications developed for GLP-1 users who need satiety and nutrient density per calorie.

A legacy commodity giant transforming itself into a functional biotechnology ingredient supplier. The mill that survived everything else is adapting rather than closing. The carbohydrate paradigm has officially broken, and the most interesting companies right now are the ones built on what comes next.

That’s it for this week.
If you liked this issue, forward to a friend who obsesses over brand strategy, capital flows, or exit timing.

In the Money – following the flow of capital in consumer

P.S. We love talking to brands interested in exiting in the next 3-18 months. If you know of any brands interested in exiting, or any firms trying to help port cos manage turnarounds, we'd love to share a POV.

Email: [email protected]
LinkedIn: linkedin.com/in/fanbi/