After attracting VC interest, Brazil's Dr Jones launches equity crowdfunding round

Essa história também está disponível em português

In an unprecedented move in the startup market in Brazil, male grooming brand Dr. Jones, which had already raised several million dollars with VC funds such as Astella, Igah, and IgniteXL, launched an equity crowdfunding offer.

The goal is to raise around $686,000 to strengthen the firm’s community and customer retention. The brand operates under the the direct-to-consumer (D2C) model, attracting with 70,000 active customers in the last 12 months – and the plan is to increase that number to 100,000 clients in 2 years. Its portfolio includes razors, shampoos, and soaps aimed at a male audience. “We have a fan base, a lot of people who want to be part of the [grooming] movement. Launching a crowdfunding offer is an opportunity to leverage the power of the community, through word of mouth”, says Guilherme Campos, co-founder of Dr. Jones, in an exclusive interview with Startups.

Changing perceptions

Going in the opposite direction of the traditional market – from VC to crowdfunding – is emblematic considering how the Brazilian ecosystem perceives the latter method. Around here, equity crowdfunding is not usually seen as a great deal; instead, it has been labeled as a workaround for less attractive businesses that have failed to win over venture capital funds, and a somewhat unfavorable option for inexperienced investors.

However, perceptions are gradually changing. With several exits and growth cases of companies backed by equity crowdfunding, that route is increasingly attracting investors and interesting businesses. Funds such as Grão, Bossanova, and Capital Lab Ventures are among the Brazilian funds that have already invested in startups that raised money via equity crowdfunding platforms.

For Camila Nasser, co-founder and president of equity crowdfunding platfrom Kria – which was Dr. Jones‘ pick to launch its own offering – the male grroming brand’s case is a game-changer for the Brazilian market. “Here at Kria, we believe that it only takes one [successful case study] to change the market. And that moment has just arrived”, she tells Startups.

How Dr. Jones structured the round

Dr. Jones‘ offer at Kria is part of a $1.5 million bridge round the startup launched mid-2021, in anticipation of its Series A, scheduled to take place at the end of 2022. Igah increased its share in the company by investing half of the total the round was aiming for.

The goal was to bring in some new investors to raise the other half. Based on a suggestion from Norte Capital (one of Dr. Jones’ investors), the founders considered the possibility of raising the capital via crowdfunding. Initially, the alternative was considered but did not go ahead right away. “It was a great idea, but it could present issues in terms of governance, since there are many investors involved”, says Campos.

Eventually, the founders reconsidered that approach and decided the crowdfunding offer was the best way to raise the money. According to Campos, they chose Kria because there would be no individual contracts with each investor – it is the company’s vehicle (in that case, Kria as the equity crowdfunding platform) that joins the captable.