Consumer-focused investor Strand Equity Partners is betting on the democratization of décor with its latest deal.
The Los Angeles-based firm, which has backed brands that include Oatly Milk and Sweaty Betty activewear, said it is making a growth investment in Studio McGee, an interior-design firm and lifestyle brand launched by husband-and-wife team Syd and Shea McGee.
Studio McGee and its affiliated entities offer interior-design services, a home décor e-commerce site and a
show that features the co-founders, among other content. The fast-growing company also has a licensing agreement with
to sell products in the retailer’s stores.
The McGees launched the company in 2014 after Shea had built a large social media following that traced back to posts she put on Instagram while designing and renovating the couple’s first home. The company quickly grew, and within three years was generating some $30 million in annual sales, according to a memoir the couple wrote, “Make It Beautiful,” published earlier this year.
“Most businesses start out by trying to sell a product first,” said Kevin Chen, a principal at Strand Equity who will take a seat on Studio McGee’s board. “What they did was create a bunch of fans. Shea started this by creating a bunch of designs without trying to sell anything, and that created trust that she was there for the right reasons.”
Although the couple funded the company’s growth largely on their own, they decided to take on outside capital as sales skyrocketed, especially following the couple’s launch of a home design series on Netflix called “Dream Home Makeover,” according to Ms. McGee.
“We realized we have an international following we didn’t have six or eight months ago” said Ms. McGee. “We wanted to expand with the attention on us, but we wanted it to happen quickly. We could do it in a slower-paced fashion but it would be a more tempered growth.”
The company also saw growth bolstered during coronavirus pandemic lockdowns, as consumers focused more on their living spaces, according to Ms. McGee.
The company had been approached by some 15 to 20 investment firms over the past 18 months, according to Mr. McGee, who said that the quality of brands in Strand’s portfolio, along with the firm’s expertise, won the pair over.
Ms. McGee added that she felt that many of the brands in Strand’s portfolio have grown successfully without compromising their brand identity.
“You can tell that they are staying true to who they are,” she said. “One of our biggest fears…is that with rapid growth we would be pushed into doing things that weren’t a natural fit for us or for our customers,” she said.
For its part, Strand, which was started by entrepreneurs-turned-investors Seth Rodsky and Ted Schwartz, sees opportunities to expand the brand through licensing, product growth and additional content development as well as by pushing into new geographies, according to Mr. Chen.
Strand invests its own partners’ money and is able to hold its investments longer than many firms that manage traditional co-mingled funds, Mr. Chen added.
“I think the millennial generation is still looking for that lifestyle voice or figure, much like
was able to be for her generation,” he said. “Shea has a good opportunity to be that.”
Write to Laura Kreutzer at [email protected]
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