5 Companies That Will Be Huge in 2028 - Part 3

Welcome to another edition of “In the Minds of Our Analysts.”

At System2, we foster a culture of encouraging our team to express their thoughts, investigate, pen down, and share their perspectives on various topics. This series provides a space for our analysts to showcase their insights.

All opinions expressed by System2 employees and their guests are solely their own and do not reflect the opinions of System2. This post is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of System2 may maintain positions in the securities discussed in this post.

Today’s post was written by Kevin Nutter.

This is the final piece in a three-part series dedicated to sourcing potential investment ideas by reimagining whom we think of as an “influencer.” The goal is not to use AI/ML to evaluate brands. Instead, it’s to use AI/ML to uncover and track micro-influencers who’ve proven they are already elite brand evaluators. If you’re an early investor in private companies, stick around.

Prior Posts:

  • Part 1 - Discovering a micro-influencer

  • Part 2 - Find clusters of micro-influencers

Today:

  • Part 3 - Presenting micro-influencers’ top 5 consumer-facing companies of 2028!

Takeaways

Drumroll please…the 5 Companies That Will Be Huge in 2028 according to micro-influencer’s spending patterns are:

  1. Alo Yoga

  2. Hello Molly

  3. Faherty Brand

  4. Pura Scents

  5. Monica + Andy

As a quick reminder from Part 1 and 2, a micro-influencer is the person in the friend group whom everyone asks for new brand recommendations. They are elite brand evaluators that adopt high-growth brands before everyone else. Finding the next great brand involves some intangible combination of product/service quality, adoption across other micro-influencers, customer base, social media presence, the executive’s/founder’s personal brand, and opinions from carefully curated professional investors.

The chart below compares a brand’s popularity with trendy people (y-axis) vs. a brand’s trendiness (x-axis). The size of the bubble shows the estimated revenue for 2022, and the color of the bubble represents the YoY change in revenue.

Alo Yoga

If you live in LA or NYC, you're probably familiar with Alo Yoga. However, I was surprised to find out that they’re much smaller than Lululemon. Although the activewear market is enormous, Alo Yoga has only tapped into a small percentage of micro-influencers. Lululemon should be paying attention because Alo Yoga is poised to become a major competitor in the next few years.

Hello Molly

Co-founded in 2012, this Australian women’s clothing retailer has been making headlines in the US since 2018/2019. Its efforts have caught the attention of micro-influencers in our panel. Like all the other brands on this list, they’ve barely scratched the surface of their growth potential.

Faherty Brand

Faherty Brand is a NY-based fashion brand co-founded by two brothers in 2012. Compared to other brands on this list, its customer base has a smaller concentration of micro-influencers, indicating that its clothing resonates with both trendy and non-trendy individuals. Perhaps this broad appeal is why it's one of the fastest-growing brands in our dataset.

Pura Scents

Co-founded by an American and a Brazilian in 2014 and based in Utah, Pura sells a smart fragrance diffuser. Despite never having heard of it before, I couldn't ignore its recent growth and high concentration of micro-influencer customers. It is on point with their brand partners; Studio McGee, another up-and-coming Utah-based brand, is featured prominently on Pura's homepage. Pura surprised me, as did the market size of the fragrance industry at $72 billion. The future smells sweet for Pura.

Monica + Andy

Monica + Andy is a baby clothing retailer that focuses on organic clothing made from trustworthy fabrics. It was co-founded by siblings Monica Royer and Andy Dunn. Its origin story is higher-profile than most, as Dunn also founded the menswear company Bonobos. What really sticks out is just how many of its customers are micro-influencers. Recently, Monica + Andy announced a partnership with Walmart, so expect them to become a household name in a few years.

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