Portfolio startup Coterie closed A round and raised $23.8 millionen

Portfolio startup Coterie closed A round and raised $23.8 millionen

enThe US manufacturer of innovative baby diapers is living up to the trust of investors and customers

enCongratulations to the Coterie team on successfully closing the A round, in which the startup raised $23.8 million. Along with TA Ventures, our club invested in the project in the fall of 2020 by participating in the seed round. At the time, the funding was only $2.75 million. Less than two years later, the amount has grown almost thirteenfold. What makes a startup special?

Diapers are a conservative market that doesn't like to experiment. That's not surprising since few people would want to use their precious babies to try out innovations from startups. However, project founder Frank Yu managed to change parents' minds. According to him, the dominant manufacturers want to avoid developing their products, leaving them without significant improvements since 1985. In addition, they often mislead parents into believing that they need many diapers for every single occasion. Coterie instead offers a single solution.

The company guarantees leak protection due to 2 times more absorbency than leading brands, including Pampers and Huggies. The startup also says that it produces the driest diapers in North America that effectively help to reduce skin irritation. Compared to the industry average of 30 seconds of moisture-wicking, with Coterie diapers, it takes 16 seconds. In addition to convenience, the startup focuses on environmental friendliness. Their diapers are made with minimal CO2 emissions, which is a trend and a necessity. Another new feature turned out to be a subscription with automatic delivery and their own community for young parents.

During the seed round two years ago, venture partner of TA Ventures Oleg Malenkov stated that P&G and Kimberly Clark hold more than 85% of the market in the US by clearly winning the mass market segment. What Coterie does instead is a combination of a better product made of organic materials and a direct-to-consumer approach fueled by super high retention rates. Owning a tiny percent of a market share will result in hundreds of millions in revenue. It turned out just like that.

Since 2019, the startup has sold more than 80 million diapers, thereby taking a 1% market share, totaling $6 billion.

Read more