Pepper Gets $5.6M To Help DTC Firms With Spend Analysis

Los Angeles-based Pepper has raised $5.6 million in seed funding from Upfront Ventures, Lerer Hippeau and Manta Ray Ventures, as reported on Tuesday (Dec. 17).

The funds will be used to help grow Pepper’s mission to assist direct-to-consumer (DTC) startups and digitally native businesses. Pepper strives to help startups predict and comprehend how their business investments affect the health of their business.

Pepper’s six founders – James Borow, Sean Friedland, Chris Lorenz, Geoff Anderson, Daniel Druger and Spencer Anderson — include five Snap alums. They said the funding will enable them to help startups evaluate areas where expenses could be smarter and more effective, including marketing, salaries, office space, travel and entertainment.

All of those expenses “functionally impact a business’ all-in customer acquisition costs,” Borow, who is Pepper’s CEO, told the news outlet.

Borow added that aside from the co-founders, numerous former and current Snap employees have either invested in or are advising Pepper. These include Imran Khan, Snap’s former chief strategy officer; Jeff Lucas, its former head of global sales; Omar Hasan, its former global head of sales finance; Dante DiCicco, its current head of international expansion; and Cristina Grace Borow, who formerly focused on brand partnerships for Snap and is also James Borow’s wife.

“It’s very Snap-heavy,” Borow said, according to the report, because people are “bullish” about what he and his co-founders built across their different disciplines at the company. Snap, he added, has a “very deep talent pool.”

It’s not clear what Pepper will specifically do for startups, or what differentiates them from other financial analytics platforms. Borow, who used to head Snap’s revenue programs and sold a social ad platform for $50 million, is not disclosing any details. However, he did share that when Pepper launches in beta in the first quarter of 2020, there won’t be a charge, and that privacy is part of “its core.” Premium features, which will come at a cost, are on the way.

The potential trouble with DTC brands is that the name belies how hard it is to reach and recruit consumers. This is particularly challenging for unknown emerging brands, and it gets exponentially harder the more crowded the field becomes.