Pulse News

**Investors Drop Celebrity Brands From A-List**

**By Ann Gehan**

Feb 25, 2025, 6:02am PST

These days, it seems like every celebrity wants to start their own brand. Just look at Robert Downey Jr., who raised venture money last year for a coffee company he co-founded, or the gamers-slash-boxers-slash-influencers launching their own energy drinks, men's body wash, and more.

But investors say they're overwhelmed by pitches for undifferentiated or low-quality goods and are quickly souring on the sector. Four early-stage investors who previously backed celebrity brands said they are shifting focus to promising products as opposed to celebrity buzz, especially after high-profile flops in once-trendy categories like beauty.

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That could be a rude awakening for new brands hitting the market—more celebrities than ever are trying to raise money for consumer startups, especially in buzzy sectors like healthy snacks and drinks, the investors said.

One investor was recently pitched on a "protein puck" cookie-like snack fronted by a rapper, but passed after the investor didn't like the taste. The firm was also reluctant to invest given the number of high-protein products already on the market, the investor said, and wasn't convinced the rapper's fan base was enough to make the snack a breakthrough right now.

Another investor heard pitches from the Jake Paul-founded brand W, which sells men's body wash, deodorant, and other products, and Tone Body, a new line of men's deodorant and lotions co-founded by Twitch streamer Kai Cenat and other members of his AMP group of influencers, over just a few weeks late last year. The firm, not wanting to back a new launch in a category dominated by conglomerates like Procter & Gamble, passed on both, the investor said. Still, the category has been a popular one for recent celebrity launches—Dwayne Johnson ("The Rock") launched his own personal care brand, Papatui, last March.

The investors said they're inundated with pitches seeking premium valuations that don't offer much that's different from existing brands, save for their famous founders. At the same time, even a big social media presence and rabid followers aren't enough to guarantee sustained sales growth.

Influencers Logan Paul and KSI, for example, saw sales of their Prime-branded energy and sports drink fall nearly 50% in the first nine months of last year, according to NielsenIQ data, a big reversal from surging sales in 2023. Congo Brands, the company that operates Prime, didn't respond to requests for comment.

"Why you see a lot of these brands fall by the wayside is because there's just not that dedication to it, or the brand positioning strategy wasn't fully baked out—it's sort of like, OK, let me put my name on this product and launch it into the world," said Liz Ahern, a marketing and growth consultant and the former chief marketing officer of Chamberlain Coffee, launched by YouTube and Instagram star Emma Chamberlain in 2019.

The most successful celebrity brands have differentiated products, hedging against any downfall in the popularity of the celebrities themselves. That can help them avoid the fate of Morphe parent Forma Brands, which filed for bankruptcy in early 2023 due to ties with several celebrities accused of misconduct. Skims, for example, created a new category of shapewear that embraced more stylish slimming products, which helped it unseat older rival Spanx.

"The brand has to have really strong and clear positioning from the outset—it can't be all tied up in the celebrity,” Ahern said. “Brands that do it well leverage aspects of what the celebrity stands for in their positioning, but they can evolve beyond it."

**Spoiled Investor Appetites**

Over the past four or five years, more celebrities have sought venture funding to launch their own consumer brands, as opposed to licensing their name to slap on a product or serving as a spokesperson. A built-in fan base or easy access to an audience of millions on social media was often enough to win investors. Nearly 40 brands founded by celebrities or influencers have secured funding from venture capital investors since 2022, according to PitchBook data.

Some celebrity-founded brands grew quickly—Kim Kardashian co-founded Skims in 2019, and it has grown to $750 million in revenue. Selena Gomez co-founded Rare Beauty, launched a year later, which has grown to an estimated $750 million in sales.

More recently, some celebrities have set their sights on food and drinks pitched as healthier alternatives to big brands. These products have been a resilient corner of the consumer market. Brands early to the trend have already racked up sizable sales. Goodles, a line of high-protein boxed macaroni and cheese launched by actress Gal Gadot in late 2021, is targeting roughly $100 million in total sales this year, a person with knowledge of the company's finances said. The company has said sales more than doubled in 2024. Goodles didn't comment.

Goodles, backed by L Catterton, offers flavors like cacio e pepe that appeal to teens and adults. That helps it stand out from brands like Annie's, sold to General Mills in 2014, which mainly targets kids and families.

Later-stage investors and acquirers have also been showing interest in trendy food and drinks. Olipop raised fresh funds at a $1.85 billion valuation earlier this month, and energy drink maker Celsius last week announced it would acquire rival Alani Nu, founded by fitness influencer Katy Schneider in 2018, in a deal valued at $1.8 billion.

Celebrities who are still looking to hop on the food and drink bandwagon include Khloe Kardashian, who is preparing to launch Khloud, a line of high-protein popcorn and snacks, with backing from investment firm K5 Global. And actor and director Ben Stiller has applied for trademarks for potential beverage brand names including Stiller's, filings show. A representative for Stiller didn't provide a comment.

But new food and drink brands face stiff competition from bigger startups. The market for healthy soda is already dominated by Olipop and rival Poppi, which have grown to $400 million and $500 million in annual sales, respectively. Both have found success using ad deals with smaller influencers and creators.

And a glut of new food and beverage brands threatens a shakeout like the one that's already playing out for makeup and skincare brands, which saw investment peak in 2020 and 2021. One example is The Outset, a skincare line launched by actress Scarlett Johansson in 2022. Beauty giant Sephora is dropping the brand from most of its bricks-and-mortar stores, two people briefed on the move said, though some products are still available to purchase online from Sephora. It's a blow for the brand to lose a major wholesale partner, though this year it started selling through Credo Beauty, a smaller chain focused on clean brands, and on QVC, in addition to its website. The Outset's executives didn't respond to requests for comment. Sephora didn't respond to requests for comment.

Brands that are slow to catch on could attempt to relaunch, but that requires patience and often fresh capital from investors. Haus Labs, the Lady Gaga-fronted makeup brand, launched in 2019 on Amazon, but sales were slow in part because of the company's limited high-end cosmetics business. Haus rebranded and switched to selling in Sephora in mid-2022, and reportedly secured fresh funding from its main backer, Lightspeed Venture Partners.

Ann Gehan is a reporter covering e-commerce and retail for The Information. Contact her via email at ann.gehan@theinformation.com, on Twitter @anngehan, or on Signal at (646) 374-8461.