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Influvestors and their impact

20 July 2020

By Jamie Williams, Senior Executive

Oatly, the Swedish alternative dairy brand, closed a fundraise last week raising an impressive $200 million. The funding round, which was led by one of the world’s largest PE firms Blackstone, included some familiar names: Oprah Winfrey, Natalie Portman and the entertainment company founded by Jay-Z, Roc Nation. 

A deal linked to well-known celebrities begs the question, what is the marketing and reputational opportunity for firms who bring onboard celebrity investors? Well, there is no doubt that being associated with the likes of Oprah can heighten the excitement and “buzz” around what is essentially a corporate announcement. Unsurprising, the Oatly fund raise caught the eyes of an impressive number of reputable news outlets. 

It must be remembered that celebrities are often not acting as just investors. Their involvement in the company also comes in the form of influencer activism and furthering a cause which is close to them. In the case of Oatly, for Natalie Portman, it is veganism, and for Oprah, it is health and fitness. Oprah has long been associated with the health sector having invested $43 million, and become a board member, of WW (formerly known as Weight Watchers). 

By no means is the success of ‘influvestors’ associated with Oatly alone. Let us take a few other examples. Justin Bieber’s first significant investment was in the music streaming service Spotify. After going public, on the first day of trading, Bieber saw his share in the company rise by thirteen percent. Ashton Kutcher is another triumph. In 2011, be made a notable investment in an unknown and obscure company called Uber. According to Forbes, Kutcher’s stake in the ride sharing company is now worth $50 million.  

It is impossible to measure the extent to which a celebrity’s investment with a company brought its commercial success. However, bringing in ‘influvestors’ can also be a risky move – for both sides of the table. With a celebrity putting their name to company, their reputation is often pinned to the success of the investment. Take Justin Timberlake for example who bought MySpace, which turned out to be a $35 million mistake. It has been reported that in 2015 Justin sold his stake in the company for just $1. It would be fair to say that his entertainment career took a hit as a result. On the other side of the table, companies such as Nike and EA sports, who were closely associated with Cristiano Ronaldo, saw their reputations take a hit when the player was accused of sexual assault. 

Celebrities have long been utilised to be the front and centre of consumer marketing campaigns. And celebrities have long been investing their wealth. What we are now seeing is the merging of the two, as companies are deploying celebrities to assist with their corporate campaigns. Perhaps in a few years, top PE and VC’s marketing budget will be prominently spent on influencers.