Kindly do not forward. If there’s someone that you believe should be part of the Palette family, we’d love to be introduced.

Hi there,

We hope you and yours are healthy and well, particularly in what felt like a very long first quarter.

Looking back at 2024, it was quite the year: volatile consumer sentiment, erratic markets, explosive technology breakthroughs and anxiety about a new presidential term. In many ways, 2025 feels very much the same—volatile and uncertain—yet we see a silver lining for the year ahead.

History tends to repeat itself and there’s no question, venture has its cycles. Currently, the 2025 investment landscape presents striking parallels to the post-2008/09 financial crisis, which makes it a prime time to invest in the next generation of breakout consumer startups. Both periods were marked by economic downturns that led to valuation resets, shifting consumer behaviors, and the emergence of game-changing technology platforms.

• Macroeconomic Reset & Market Volatility
  • 2008-2009: the global financial crisis led to a massive pullback in funding, forcing startups to operate lean and focus on profitability
  • 2023-2024: rising interest rates, inflation, and market uncertainty caused a venture funding slowdown, pushing startups toward capital efficiency
  • 2025: like 2010, 2025 is positioned as a recovery year, where resilient startups can emerge stronger as interest rates ease and investor confidence returns
• Massive Consumer Behavior Shifts are Driving New Demand
  • 2008-2009: the crisis led to the rise of the sharing economy, as consumers sought cost-effective alternatives, giving birth to Airbnb, Uber, and Venmo
  • 2023-2024: the economic uncertainty has accelerated trends like AI-driven personalization, curated marketplaces, alternative financing models and subscription-based services
  • 2025: we believe startups that align with affordability, convenience, quality and community-driven commerce stand to win
• Technology Inflection Points Create New Consumer Experiences
  • 2008-2010: we witnessed the smartphone and social media revolution (iPhone, Facebook, Instagram), which reshaped how people interacted, shopped, and consumed content
  • 2023-2025: consumers have adopted the convenience of digital and social commerce, so no doubt that AI is enabling new personalized consumer experiences—from shopping, to healthcare, to nutrition, to beauty
• Valuation Resets make Early Stage the most Attractive Opportunity
  • Post-2008: VC firms slowed down funding for growth stage companies, but seed-stage investments thrived as valuations were more attractive
  • Current-2025: growth stage startups are struggling with high burn and down rounds, while seed stage consumer startups are being built in a lean and disciplined way, given the lack of “free-money” flowing into the category

2025 is presenting itself to be even better than post-2008/09. First of all, there’s more capital available now, despite the downturn, thanks to dry powder from growth stage funds and the availability of alternative funding mechanisms (ie. rolling funds, crowdfunding, family offices and angel investors). Then, there’s no question that AI is accelerating startup growth like never before by giving rise to entirely new innovations, and drastically lowering the cost of building and scaling startups; from customer support to product development, startups can do more, with fewer employees, making them even more capital efficient from the onset. Additionally, consumers today are shopping with a digital-first mindset. In 2010, consumers were still transitioning online, whereas in 2025, every consumer category has embraced digital experiences, which coupled with social and creator commerce, allows new brands to gain traction at a fraction of the cost.

As they say, buy low, sell high. Unlike the overfunded startups of 2021-2023, we’re already seeing today’s Seed stage companies building in a leaner and more capital efficient manner, meaning smaller initial raises and strong focus on fundamentals from the onset, leaving more room for upside at exit, when markets recover. Fortunately, early stage investors enjoy the power of time: with a 5-10 investment horizon, we get to ignore the short term noise that has our mega fund peers in a holding pattern.

Cheers to an interesting and exciting 2025!

Rana & Nina

Portfolio Launches, Shoutouts and Asks 📣

• **Martie** continues to thrive against the current socio-economic backdrop: ✔️ healthy, better for you products, ✔️ 30-70% savings, ✔️ all with a sustainability mission to minimize waste?!
  • Company ask Martie is evaluating expansion into Pet, Kitchen Appliances, Electronics, Baby and Toddler. They would love some insight into demand trends and liquidation dynamics in these sectors. Let us know if you’re open to connecting!
  • Company ask As always, Martie is continuing to grow its offering across existing CPG categories: grocery, beauty & skincare, home goods and household. The team would love to introduce themselves to key decision makers at companies with strong brand awareness.
  • Company ask The Martie team is growing and they’re looking for some excellent referrals to fill some new roles: Growth Marketer (US based), CPG retail buyer (US based), CEO/COO EA (Off Shore), Product Designer (1099).
• Trellis Health is launching out of stealth this week with $2M in Pre Seed funding; official launch to consumers (with an amazing updated app…we got the sneak peek!) will happen in May.
  • Company ask Hiring a backend engineer/data engineer: Python, PostgreSQL, AI/ML, FastAPI, fintech or health data experience is a plus. Job spec here with $5k referral bonus.
  • Company ask Hiring a Social Media Associate: 0-2 years experience, hungry to learn, excited about content creation, high-growth & high-impact opportunity to craft a social dialogue around women’s health and longevity.

• **Caraway’s** design forward, non-toxic kitchenware is your answer to removing microplastics from your kitchen. Shop their famous Cookware, Bakeware and new Airtight Storage Containers with 20% off, code: friendsofcaraway20
  • Company ask Caraway is looking for connections and resources (brands, import lawyers, supply chain experts and manufacturers) with innovative ideas to manage tariff exposure.
  • Company ask Caraway is exploring the build of a US factory, so they’d love to connect with other brands who have successfully done so.