Foot Locker Inc., No. 44 in Internet Retailer 2018 Top 1000, made a $12.5 million minority investment in Launch Kids Inc., an online, direct-to-consumer children’s apparel brand founded in 2017 that does business as Rockets of Awesome.
As part of the deal, Foot Locker’s Kids Foot Locker unit will create Rockets of Awesome shops inside its stores and make Rockets of Awesome products available on KidsFootLocker.com. The arrangement will make Kids Foot Locker the largest retailer of Rockets of Awesome products in the United States, Foot Locker says.
The investment and partnership also give Rockets of Awesome funding to help expand its business and access to expertise and other resources, Foot Locker says.
“The vision for Rockets of Awesome has always been to serve the customer in as many [direct-to-consumer] touch points as possible,” says Rockets of Awesome CEO Rachel Blumenthal.
This year, Rockets of Awesome will focus its efforts on its ecommerce presence and a stand-alone brick-and-mortar retail store, which it will launch in time for the back-to-school season. The company also will pursue “a few select opportunities that we’ll test with Foot Locker,” she says. Rockets of Awesome also has been testing an in-store presence at shops including Goop, Story, everafter and Camp.
“Given Foot Locker’s status as a best-in-class retailer, there’s a wealth of expertise we will have the unique advantage to leverage given their investment in Rockets of Awesome, Blumenthal says.
Foot Locker made its Rockets of Awesome investment via a subsidiary as part of a $19.5 million Series C funding round. Before the current round, Rockets of Awesome raised $29.5 million in three rounds from investors, including Goop CEO Gwyneth Paltrow.
“Foot Locker’s innovative investment strategy enables a business of our stage immeasurable access and leverage before we have our own scale,” Blumenthal says.
Rockets of Awesome uses technology and data science to design and sell clothing for children sizes 3 to 12. Items can be purchased individually online or via subscription boxes shipped four times a year, each containing a selection of eight items.
The investment in Rockets of Awesome marks the third time this year Foot Locker has invested in a young, born-on-the-web retail brand.
Earlier this month, the sports apparel giant bought a $100 million stake in the online sneaker marketplace GOAT Group. The marketplace, opened in 2015, allows anyone to post shoes for sale on the site, but sellers must send the sneakers to GOAT for verification before they’re passed along to the buyer. GOAT, which stands for Greatest of All Time, is No. 59 in Internet Retailer Online Marketplaces. In addition to its marketplace, GOAT generates revenue through online footwear consignment shop Flight Club, which it acquired last year after raising $60 million from Index Ventures.
In January, Foot Locker bought a minority stake in kids’ sneaker company Super Heroic Inc. as part of a $3 million seed funding round. Super Heroic raised $10 million since it launched in 2016. Its investors include Magic Johnson Enterprises, a company owned by retired NBA Hall of Fame member Earvin “Magic” Johnson.
In early 2018, Foot Locker also invested $15 million in Carbon38, an ecommerce women’s luxury activewear brand.
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