Robert Solomon, the former GoFundMe CEO, secured $200 million in financing for his new business Kite, the company announced today (April 10). Kite invests in, acquires and operates consumer product companies.
Solomon founded the company last year and works as chief executive. Juxtapose, a New York-based investment firm, and Blackstone (BX), the biggest private equity firm globally, provided the funding. Blackstone manages $975 billion in assets, according to the company, and it is reportedly planning to expand its presence in startups and technology companies. It has received criticism for funding companies with ties to alleged human rights abuses.
Solomon intends to invest in commerce and technology companies that can help scale a group of other companies that Kite owns and operates, he told TechCrunch. Kite has already acquired a couple of businesses, according to TechCrunch. The details of the transactions are unknown.
“Today, entrepreneurial brands aren’t set up to thrive because commerce infrastructures are siloed, fragmented, and inefficient,” Solomon in a company statement. “At Kite, we are reimagining how products are made, moved, stored, shipped, and sold—at scale.”
The consumer product marketplace is changing in the U.S., and Solomon’s bet is that Kite is the future. The Covid-19 pandemic expedited the already growing trend of buying products online, but the market didn’t see growth between 2021 and 2022, according to a U.S. Department of Commerce report. Influencer marketing is increasingly replacing the media advertisers traditionally relied on, like print and television. Some companies are pushing live online shopping in the U.S. following the growth in China’s market, though it hasn’t gained the same traction. Over the next year, consumer product companies can expect to continue feeling the negatives affects of inflation, war, supply chain pressure and government restrictions, according to a Deloitte report.
Robert Solomon has built other commerce companies
Solomon’s experience running commerce companies could give him an edge in the market. During his six years at the helm of GoFundMe, a crowdfunding platform, Solomon oversaw total donations increase from $1 billion to $15 billion, according to company reports. Previously, he worked as president and chief operating officer at Groupon, a site that sells vouchers for products and services. During his two years at Groupon, revenues increased from an estimated $460 million in 2010 to $2.33 billion in 2012—a fivefold increase—the company reported.
With Solomon in charge at GoFundMe, the company lost the trust of some patrons after bad actors swindled $400,000 out of donations using a false story. The company then instituted a trust and safety team to address future scams. Crowdfunding for medical care through GoFundMe has also been criticized for benefitting the wealthy, which can “entrench or exacerbate socioeconomic inequality,” according to a report by the Conversation, a Canadian news organization. Solomon told the Atlantic this claim is “hogwash.”
The executive has an investing background as well. He has invested in more than a dozen companies, including business-messaging platform Slack and “buy now, pay later” service Uplift, according to his LinkedIn. He worked as Yahoo’s commerce and shopping head from 2000 to 2006.