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TM
For years, the venture capital world has divided itself neatly into two camps: “consumer” and “enterprise.” But this distinction has become increasingly obsolete, especially as investment in traditional “consumer” companies has dropped sharply. In our view, the brand- and marketing-heavy consumer investing era has come to an end. A new category of consumer companies is emerging, driven by scalable infrastructure — ushering in a new dawn of “infra-first consumer companies”.
At first glance, “infra” may sound boring, but it’s the backbone of data collection and, ultimately, the foundation of AI. Many of today’s infra-first consumer companies began as “ops-heavy” businesses, scaling through airtight operations that streamlined basic workflows. However, this focus on operational excellence, enabled these businesses to collect the data needed for eventual automation, unlocking entirely new levels of efficiency and scalability.
The founders driving this shift defy the traditional stereotypes of “consumer founders.” They are not solely focused on understanding trends, crafting compelling branding, or mastering marketing. Instead, they are highly methodical, technical leaders capable of rapid experimentation and aggressive scaling.
Take Uber as an example. Travis Kalanick is data-focused and ruthless. Under his leadership, Uber was not only known for its cutthroat culture, but also for developing “best-in-class” data-infra, in-house, that enabled rapid scaling. That technology proved so robust that many early team members, largely engineers, have since spun off companies to bring these infrastructure solutions to the broader market. Companies like Chronosphere (observability platform), Tigris (storage platform), Rengage (AI growth marketing assistant), and Single Origin (data semantic platform) all trace their roots back to Uber’s internal infrastructure.
Another prime example is ByteDance, the parent company of TikTok. Its most successful products, TikTok and Toutiao, are powered by algorithms so advanced that ByteDance would rather see them shut down to protect the technology than sell to third parties. Competitors like Instagram Reels and YouTube Shorts have tried to catch up — but so far, they’ve fallen short.
Many of our emerging portfolio companies are also strong examples of how an emphasis on infrastructure can unlock rapid scaling. OpenArt grew from less than $1M to ~$10M in ARR with 8 people in less than a year, and Solvely.ai went from zero to ~$7M in ARR in a year, both driven by methodical experimentation and a high velocity of product releases, rapidly integrating the latest AI to drive hyper growth.
Tesla and DJI are not just hardware companies, they’re technological powerhouses. Their capabilities extend far beyond algorithmic and software infrastructure to physical supply chains and battery technology. With fully integrated solutions across their entire stack, Tesla might be the first company to achieve autonomy at scale across multiple product categories — from self-driving cars to home robots.
Why did Basis Set, an AI and infra-focused investor, choose to invest in Quince, a consumer company? Quince’s success has nothing to do with branding or marketing. Instead, it’s driven by an ultra-efficient supply chain and cutting-edge technology that allows it to offer products at half (or less) the price of competing brands. That’s real consumer value, built on scalable infrastructure.
At scale, Quince aims to create a fully vertically integrated solution, spanning raw materials, manufacturing, and consumption. Costco’s famous $4.99 rotisserie chicken, a product sustained by vertical integration from farm-to-table, is a fitting parallel. In the future, Quince could take this even further, potentially introducing autonomous manufacturing with industrial robots right here in the United States.
Historically, “infrastructure” has been synonymous with developer tools, databases, and ML infra. And while these areas remain a core focus (representing about half our portfolio), the definition of infrastructure in the AI era should be much broader. The next generation of infrastructure companies will power every aspect of life and business, extending far beyond traditional boundaries.
We are at the dawn of a golden age for Infra-first Consumer companies. These new businesses will be capable of achieving near-infinite horizontal and vertical scale. Consumer investing will never be the same as branding-heavy approaches are replaced with tech-enabled, infrastructure-driven strategies that generate lasting value.
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