VMG Partners Closes $1B Consumer Fund VI

VMG Partners closed its sixth fund at its “target and hard cap” of $1 billion, the growth equity firm announced today. VMG Partners VI, L.P. (VMG Consumer VI) is backed by returning and new limited partners, according to general partner Robin Tsai.

“Across market cycles, we continue to double down on what we do best – rolling up our sleeves to help founders build iconic brands that are redefining the consumer experience,” Tsai said in a press release.

Since its inception two decades ago, VMG has invested in more than 60 consumer brands including KIND Snacks, Spindrift, Lily’s Sweets, nutpods and GHOST. Headquartered in San Francisco, the firm invests through its two core funds, Consumer and Technology, writing checks of up to $200 million to high-growth startups with proven concepts and clear paths to profitability.

“VMG’s innovative approach is driven by a mission to do good by the consumer ecosystem,” said general partner Wayne Wu in a press release. “We are grateful to our limited partners, many of whom have been with us since our inception, for their strategic mentorship.”

PJT Park Hill served as placement agent for VMG Partners, and Latham & Watkins provided legal advice.

Wu participated in a panel at the Beverage Forum conference earlier this month, noting that in the last few months he had seen “more high-quality, well-built companies” than he had in a long time – a reflection of the discipline investors sought after a period in the previous decade, where a surge in investment interest from other funds in less-than-profitable companies focused primarily on sales growth had driven valuations higher over riskier propositions.

During the COVID-19 pandemic, he said, the move to fiscal discipline as part of a company’s DNA changed, but brands hadn’t fully adjusted initially.

It had taken brands about three or four years to fully adjust to the new goalposts, he said, comparing the change from the frothier environment to stages of mourning. Now, brands were through denial and acceptance, on to change and evolution, Wu said.

As part of that evolution stage, “we’re seeing higher quality companies than we’ve seen in a long time. I’m optimistic about the pipeline of strong investment opportunities for VMG and other investors,” Wu said.