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Orange Dot Ventures LLC founder Matt Jung. Orange Dot Ventures LLC founder Matt Jung. COURTESY PHOTO

Orange Dot Ventures, new PE firm from Comfort Research co-founder Matt Jung, completes first deals

BY Friday, September 02, 2022 11:10am

A new West Michigan private equity firm has kicked off with a pair of deals for direct-to-consumer products companies. 

Orange Dot Ventures LLC, formed by Comfort Research LLC co-founder Matt Jung, closed Aug. 1 on deals for Wilma Schumann, a mid- to high-end skincare line, and Simplesa Nutrition, a maker of nutritional supplements for people with ALS and Parkinson’s. The two companies had a common owner who operated them from his base in Miami. 

Jung invested his own capital in the deal and brought on 10 additional investors, all of whom were based in West Michigan. Both companies align with Orange Dot Ventures’ strategy to invest in scalable direct-to-consumer products companies, he said. 

Founded in 1985 by a German immigrant, Wilma Schumann offers a line of skin maintenance, renewal and repair products, including cleansers, toners, moisturizers, treatments and specialty items such as anti-aging serums. 

“Wilma Schumann had been around for a long time, primarily focused on salons and spas, but they did have part of their business that was on the direct-to-consumer side,” Jung told MiBiz. “I am focused on continuing to support and grow the salon and spa business and then really ramping up the direct-to-consumer side of that business.”

Meanwhile, Jung said acquiring Simplesa Nutrition “just felt right,” given his mother has been dealing with the effects of Parkinson’s for 12 years. 

“I know how debilitating and frustrating and awful of a disease it is,” he said. “Seeing something that could help people and has been around and was proven that it could assist with some of the effects of ALS, the effects of Parkinson’s — that’s what Simplesa really does.”

Terms of the deal were not disclosed

The law firm of Miller, Johnson, Snell & Cummisky PLC and accounting firm Echelbarger, Himebaugh, Tamm & Co. PC, both based in Grand Rapids, advised on the transaction. 

‘Take it slow’

According to the most recent data tracked by the American Investment Council, formerly the Private Equity Growth Capital Council, the dollar value of private equity investments in the second quarter fell by 42 percent on a year-over-year basis, while deal volume dipped 28 percent. So far this year, strategic acquisitions accounted for 57 percent of deal volume.

U.S.-based private equity firms raised $176 billion in the first half of 2022, a little more than half of what they raised all of last year. As well, private equity dry powder was $749 billion as of June, which has edged downward since reaching a high of $846 billion at the end of 2020, American Investment Council reported. 

For Orange Dot Ventures, the deals mark the latest step in a process to launch the firm that began in 2019. At the time, Jung and Comfort Research co-founder and co-CEO Chip George had just solidified plans to hire a CEO to accelerate the company’s growth to the next level. Jung and George had led Comfort Research, which makes and markets bean bag chairs and pool and patio furniture, for 26 years. 

“We had been doing the co-CEO thing and we felt that if we brought in a CEO with some additional outside experience, we could accelerate our growth pace, and that’s exactly what we did,” Jung said. 

An entrepreneur at his core, Jung took the first few months of the COVID-19 pandemic to try different ways to engage his interests in business, including “dabbling” in venture capital, private equity and participating as an investor in private companies. Jung said the initial process left him unfulfilled, so he worked with a business coach to narrow his focus to create a private equity firm to invest in scalable direct-to-consumer products companies. 

Orange Dot Ventures targets growing and profitable U.S. companies with $3 million to $10 million in revenue that have outsourced production of small products that can be easily handled by a third-party logistics provider. The firm is seeking ownership buyout deals in which it acquires a majority stake and has control of the prospective company. 

“It’s really coming in and taking over as the manager and putting the systems and processes in place, the best practices in place, that I’ve learned over my last 26 years at Comfort Research and looking to get creative on the advertising side and promoting and getting after it,” Jung said.

Orange Dot also is taking a traditional private equity approach in looking to grow its targeted companies over a three- to seven-year time horizon. The firm aims to invest in three to five deals in its first 18 months, although Jung currently is taking a three- to six-month pause to dive into Wilma Schumann and Simplesa Nutrition. 

“I’m looking to take it slow,” Jung said. “I don’t have any pressure on me other than my own to do additional deals. I want to make sure that I can provide enough focus and energy into my existing deals before I consider doing the next one.”

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