Kate Morris wants to change the world of private equity

Having scaled Adore Beauty from a humble Melbourne garage to its $650m listing two years ago, Australian e-commerce veteran Kate Morris is ready to grow her next big thing.

Justin Ryan and Kate Morris form part of the ‘Glow Squad’.

Having scaled Adore Beauty from a humble Melbourne garage in 2000 to its $650 million listing on the ASX in 2020, Australian e-commerce veteran Kate Morris is ready to grow her next big thing. She and private equity stalwart Justin Ryan have assembled what could be described as The Avengers of technology and e-commerce investing, putting together the “Glow Squad” – a brains trust of e-commerce and consumer technology founders. They’re all contributing their time, money and expertise to Glow Capital, a new growth equity firm that is investing in high growth brand-driven companies across Australia and New Zealand.

Morris says Glow is taking a different approach to private equity, deploying more women into investment decision-making roles, and backing future-focused and purpose-driven brands.

“We saw a gap in the market for a partnership-style and very founder-focused growth equity option,” Morris says. “It’s something we see a lot of in the US market, but certainly my experience as a founder was that I was looking for a growth partner and there just weren’t a lot of options.”

Morris, who is remaining at Adore Beauty as its chief innovation officer, says venture capital firms predominantly focus on investing in software and tech businesses, given that it’s typically their area of expertise. “If you have anything adjacent to that then it’s often not the right fit,” she says. “And in private equity you have a lot of buyout funds that sometimes see management as interchangeable, or there are things they often want to do in terms of stripping out costs or loading up debt, and it’s not really a growth mindset.

“We want to support the people who have built and grown the business and are at the heart of what makes it amazing, and think about what we can do to actually support their growth journey. And (we want to) reduce the risk of failure while being really respectful of the culture and values that they have built.”

Adore Beauty founder Kate Morris started her company in a garage and launched it on to the Australian stock exchange in October 2020. Picture: Eamon Gallagher

Morris adds that when scaling up their businesses, company founders often face roadblocks that aren’t external per se but more often situations they haven’t experienced yet and therefore don’t know how to handle.

Glow co-founder Justin Ryan, who describes himself as a “traditional private equity guy”, says his company will invest specifically in later-stage growth companies, making investments of $20 million to $50 million.

Ryan joined Catalyst Investment Managers in 1997 and spent the past decade at Quadrant Private Equity. He was chair of the Australian Venture Capital Association in 2003, and has served as chair of Adore Beauty, Grays, Quad Lock and Modibodi.

“I don’t want us to be pigeonholed as e-commerce and consumer investors. I’d describe us as growth investors,” Ryan says. “No doubt that will include some interesting opportunities in the e-commerce and consumer markets, and Kate comes from that world herself as a founder, but we’re in the part of the market where what we’re investing in is likely tech-enabled in some way, and likely has some element of digital strategy. Where there are great growth opportunities, and we can be there to support and enhance them, we will.”

The so-called Glow Squad includes Pet Circle co-founder James Edwards, Sweat co-founder Tobi Pearce, Smiling Mind co-founder and chair Jane Martino, Sand & Sky co-founder Sarah Hamilton, Flora & Fauna chief executive Julie Mathers, and RangeMe CEO and founder Nicky Jackson.

Sweat co-founder Tobi Pearce. Picture: supplied

“By setting up a business that has a diverse team and diverse set of decision-makers, we believe not only will that result in better thinking, but also a more interesting lens on the opportunity set, because we will have a bunch of different eyes and different people seeing the opportunities others might not see,” Ryan says.

“Our competitive advantage will also be to act with confidence, because we will have the right set of people around the table who can have that confidence and have that diverse perspective.”

Nicky Jackson is the chief executive of RangeMe, which she says is the largest global product discovery platform, partnering with large retailers such as Walmart and 250,000 other suppliers.

“I’ve admired Kate from the sidelines for some time, and I really believe there needs to be a diversity shift in private equity both here in Australia and globally,” Jackson says.

“Kate has the successful friendly-founder skill set that doesn’t exist in most private equity or venture capital firms, and it’s absolutely priceless for businesses who are lucky enough to partner with Glow … Justin of course has the private equity experience, and together they have started to build the most incredible, diverse team. I got involved in the Glow Squad because they recognise the importance of diversity and having a team of founders, aka the Glow Squad, to support the businesses they invest in.”

James Edwards, co-founder of Australian online pet store Pet Circle, says his early involvement with the Glow Squad has been invigorating.

“I enjoy working with other founders; their focus and creativity is energising,” Edwards says.

“The No. 1 rule when helping founders is to listen to what they need before offering them help, so you need to be flexible and do the work to understand what they need to grow. Recently, I have been advising startups on scaling up and the best ways to apply data and technology to their business strategy.”

Morris says Glow Capital can ultimately help build a better pathway for growth-stage businesses in Australia.

“If we can see more of those businesses succeeding on a global scale, then that will be tremendous,” she says. “I want to see businesses grow from where they’ve got the founder, who has a huge amount of resilience, to add experience and capital to see what they can do on a global stage. To me that’s very, very exciting.

“We want to take Australian stories, including brands and businesses, and take them to the world and just build a real portfolio of success stories over time.”
Get a glimpse into the future with The List: 100 Innovators 2022, a celebration of Australia’s boundary pushers and innovators.