RX3, the venture firm co-founded by football star Aaron Rodgers, Nate Raabe and Byron Roth, has raised $150 million from athletes and celebrities for its second consumer-focused growth equity fund,
The new fund counts athletes such as Buffalo Bills quarterback Josh Allen, Detroit Lions quarterback Jared Goff, retired swimmer Michael Phelps and celebrities including Christina Aguilera, Josh Duhamel, Machine Gun Kelly and Vanessa Hudgens as investors, Raabe, RX3’s managing partner, said in an interview. RX3’s trio of founders invested more than $30 million in the vehicle, he added.
“This has been a very interesting time for fundraising for both funds and private companies,” said Raabe. “Founders are excited to have us, as we provide access, value and credibility,” he said, referencing RX3’s efforts to increase revenue at portfolio companies in part by making introductions to its investor network.
RX3’s roster of celebrity and athlete investors often want to “do whatever they can” to bolster a business, whether it’s through social media posts, podcast mentions or other means, Raabe said.
“As a founder myself, I know the value of aligning with the right partners — RX3 is a perfect example of this,” Hudgens, one of the fund’s investors, said in an emailed statement. The 34-year-old actress and singer has co-founded companies including beverage maker Caliwater, skincare brand Know Beauty and craft cocktail specialist Thomas Ashbourne
Rodgers, best known for his tenure at the Green Bay Packers including a Super Bowl win in 2011, has been traded to the New York Jets.
Given Rodgers’ move to the East Coast and as the firm expands, there may be an opportunity to open a New York office, Raabe said. Orange County, California-based RX3, named for the first initial of all three founders’ surnames, is also a play on its target of delivering a return of 3-times or better, he said.
“This close of RX3’s second fund marks a new opportunity to support the next generation of leading consumer brands through differentiated capital,” Rodgers said in an emailed statement.
Rx3’S first fund, which made bets on massage-gun maker Therabody, rowing-machine specialist Hydrow, Corepower Yoga, grooming-products maker Manscaped, Mack Weldon and Super Coffee, has begun to reap solid returns, he said. RX3 has achieved a 62% blended internal rate of return from its first four exits, including pet food brand Nom Nom’s sale to Mars and eyewear firm Prive Revaux’s majority stake purchase by Safilo. The firm declined to disclose the first fund’s overall returns.
Its latest fund, which has a five-year investment period, has made just one wager to date: TAXA Outdoors, a maker of camper trailers, alongside L Catterton.
“We think the valuation reset is really healthy — the days of direct-to-consumer brands raising at high valuations are long gone, the focus is now on true profitability and fundamentals,” Raabe said, adding that “more of a correction” could be coming. Convertible notes and bridge rounds, which some startups have leaned on to avoid so-called down rounds, are of interest to RX3, Raabe said.
