CARY – Cofounders Capital, a venture firm focusing on early stage startups launched in 2015, recently made its biggest investment to date:
The funds went to digital marketing startup marGo, also based in Cary. And the deal is much larger than the typical 6-figure investment made by the firm, which has raised $43 million in two funds since its launch by serial VC David Gardner.
“This is our largest initial investment we’ve ever made,” declared Cofounders partner Tim McLoughlin, who joins the marGo board as part of the deal.
So why such a big investment?
“The Direct Sales industry saw rapid growth in 2020. When you combine that with the overall trend of the growing gig economy and eCommerce, this is an exciting time to be investing in this space,” McLoughlin explained.
“Of course, this investment starts with marGo’s exceptional management team. On top of that, we recognized a rapid shift in this market. The direct sales industry saw hyper-growth in 2020, partly due to the pandemic propelling virtual selling, more people entering the gig economy, and consumers shifting from traditional retail to online direct channels. The team at marGo understands the industry’s challenges—and opportunities—and the company is well-positioned to serve the direct sales industry and help these innovative companies lean into the digital future.”
marGo focuses on digital marketing and customer relationship management, or CRM.
Led by CEO and founder Dean Yellets and Chief Operating Officer Alex Withers, who joined the firm in 2019, marGo’s latest round of $4 million also includes Rapp Ventures. The firm has now raised $8 million.
The new funds will be used to expand its sales and marketing efforts and for continuing product innovation.
Ed Rapp of Rapp Ventures becomes marGo’s executive chairman in the deal. He and Jay Rapp formed Rapp Ventures, a private equity firm, in 2018. It is based in Cary.
“The direct sales industry has historically done a great job of launching strong products, then recruiting and training independent sellers. However, in the modern digital retailing environment, they also need to embrace digital marketing and customer-centric CRM programs in order to survive and thrive,” Withers said in the funding announcement. “The capital raised will help fuel our growth in the market and accelerate the deployment of our solution to help direct sellers elevate their marketing game.”