How Wharton became a hotbed for direct-to-consumer firms after Warby Parker, as 400+ startups now try to be the next Warby with toothbrushes, bras, and more
Wharton professors, venture capitalists, and entrepreneurs are fueling an entire generation of Warby Parkers. Tweets: @thecuriousrose , @ataussig , @ainsleyoc , and @stevesi Tweets: Rose Tantraphol / @thecuriousrose : There are now an estimated 400-plus DTC #startups that have collectively raised some $3 billion in venture capital since 2012. #entrepreneurs http://twitter.com/... Alex Taussig / @ataussig : None of these companies have ever said, “We want to be the next Warby Parker.” I love (and wear) Warby's, but each of these companies should be judged on its own merits. That said, in retrospect few industries look as attractive for dtc disruption as eyewear did in 2011! http://twitter.com/... Ainsley Harris / @ainsleyoc : For online retail startups, “Customer Acquisition Cost is the new rent.” http://www.inc.com/... @stevesi : “Now there are more than 400 startups tackling products from toothbrushes to bras. What could go wrong?” // A fantastic article about Direct To Consumer. CAC, Branding, TAM, Retail, Millennials, M&A and more covered. Why the next Warby is so hard... http://www.inc.com/...
Context & Ripple Effects
Warby Parker's $75M raise at a reported $1.75B valuation in March 2018 was the proof point that turned a single eyewear success story into an investment thesis. Two months on, the Inc. report documents the result: an estimated 400-plus direct-to-consumer startups — collectively around $3 billion in venture funding since 2012 — cloning the playbook across toothbrushes, bras, and everything else, with Wharton professors, VCs, and alumni networks acting as the distribution system for the model.
The retrospective matters because the same coverage stream already shows cracks: high-profile DTC startups later struggled to make their economics work as customer acquisition costs climbed, and by 2023 nearly half of tracked footwear and apparel brands had pushed into physical stores. The 2018 wave was the peak of the online-only thesis; everything after it is a correction.
First-order effects
- Venture dollars concentrate on category-cloning: with 400+ funded entrants, each new Wharton-born brand competes not just for customers but for the same consumer-growth investors who backed the template.
Second-order effects
- Rising acquisition costs push the cohort toward retail and alternative channels — the dynamic behind Tim Armstrong's dtx company, which funds DTC startups via real-world pop-up events rather than pure digital spend.
- The exit market splits: acquirers pay $100M+ for capital-efficient brands like MVMT and Native that raised little to no venture capital, while heavily funded clones face down rounds or shutdowns.
Third-order effects
- If the pattern holds, DTC consolidates from hundreds of venture-funded single-category brands into fewer omnichannel operators, with physical presence becoming standard rather than heresy — and the Wharton pipeline pivoting from founding clones to supplying talent for the survivors.
The trend: Direct-to-consumer is cycling from venture-fueled online-only cloning toward economics-driven omnichannel retail, with the 2018 Wharton wave marking the peak of the first phase.