Consumer Tech and Vertical SaaS: Inside Carle Stenmark’s Investment Playbook

The consumer tech landscape is at a crossroads. AI, automation, and vertical SaaS are transforming the way brands operate, but the pace of change raises a fundamental question: how do companies embrace innovation without losing the human connection that drives customer loyalty?

Few understand this balance better than Carle Stenmark, General Partner at VMG Partners. With $3.4 billion in assets under management and a portfolio that includes Afresh, Claim, Boulevard (BLVD), and FERMÀT, VMG has built a reputation for supporting founder-driven businesses at the intersection of technology and consumer experience. Carle’s philosophy is simple but powerful: do well, be good. If the brands he supports are making positive contributions to their markets, it’s a victory not just for investors, but for the communities and consumers they serve. 

Guiding VMG’s technology-focused strategy is Carle Stenmark, General Partner at VMG Partners, a veteran investor whose approach is as much about people as it is about performance. A former entrepreneur, Carle brings curiosity, optimism, and respect to every partnership.

“The companies we partner with are founder-driven and managed by passionate people, people I genuinely enjoy and respect,” he says. 

In this conversation, Carle shares how he spots opportunity in consumer tech, vertical SaaS, and AI-driven platforms, and why his investment philosophy starts with people, not just performance.

Hey Carle, thanks so much for joining us. Before we dive into the trends and tech, I’d love to get a bit of context on your personal journey. Can you walk us through how you ended up at VMG Partners, what your leadership role was, and what kinds of projects you’re driving there today? 

Carle Stenmark: Sure. So I joined VMG 13 years ago at the beginning of our second consumer fund. Since it’s been with the firm, you know, for a decent amount of time at this point. So I started out investing in branded consumer products for the first seven or eight years of my journey and then really just noticed how big of an impact technology was having on the consumer ecosystem and thought that. 

You know, I was more excited about that impact going forward and how it would change the landscape of both CPG and retail and thus really worked with our existing investors or LP’s to launch a new strategy within VMG, which we’re now calling VMG Tech, but really the premise there is find disruptive technologies that are impacting the consumer ecosystem broadly, particularly brands and retailers and helping them scale faster, more profitably and by delivering better experience to their end consumers. 

That’s fascinating. It sounds like technology really reshaped your focus. I’m curious, looking back, what inspired you personally to take this path? Was it more the excitement of the tech itself, or seeing firsthand how it changed businesses? What drew you to this specific field? 

Stenmark: Yeah, I mean, I think you know, maybe taking a step back when I join DMG, we’re very involved with the portfolio companies that we invest in.

And so I joined, like I said, in 2012, and, you know, at the time, you know, the tech stack really consisted of the ERP system and that was it. I think I saw firsthand how this was evolving with the advent of social media, which was changing martech significantly, then you had, really, Amazon and Shopify changing a lot of the routes to market, and then eventually more and more supply chain disruptions, which were requiring the adoption of technology faster and faster. 

So I was working closely with the founding teams of our consumer businesses and really saw firsthand and struggled with the rapid evolution of how supply chains and supply chain disruptions were evolving, and then demand with both social media and e-commerce was moving with trends faster and faster, and so all of the portfolio companies I was working with, were really struggling. How we best balance supply and demand in a cash and margin effective way that delights all stakeholders, and the solution to this technology. That’s what got me really excited to launch VMG technology and co-head this effort where we’re investing in these businesses. 

That makes total sense. So if I’m hearing you right, the combination of technology and supply chain challenges really shaped your focus. Over the years, with shifts like social media, e-commerce, and now AI, how has your overall investment philosophy adapted? Or has it remained consistent even as the landscape changes? 

Stenmark: Yeah, it’s a good question. I actually wouldn’t say that our philosophy has changed. I think we’ve always been looking to back amazing founders with strong domain expertise that can impact, you know, real problems in the consumer ecosystem. 

What’s probably changed the most is the opportunity set, especially within supply chain and operations, given the increasing challenges of the macroeconomic environment that you’ve alluded to, as well as with the advent of AI. This advancement in technology has really started to decrease the time, the cost, and the pain of integrations and implementations, which makes legacy solutions less sticky and the relative value of emerging solutions more palatable. 

And I think that’s been really exciting about the last three years: You’re seeing much more innovation within supply chain and operations, and you’re seeing a greater willingness of the consumer end market to adopt and implement these solutions. 

Speaking of AI, it’s everywhere right now. Some say it’s a game-changer, others worry it’s hype. From your perspective, has AI been a challenge to integrate into your strategy, or do you see it as inevitable for any investment in consumer tech today? 

Stenmark: No, I think it’s inevitable. I think everything that we look at has AI as a component of the business, whether it’s an AI native business or whether it’s, you know, the engineering teams now just using AI. 

Building products more quickly or onboarding teams to ingest data faster and clean it up, back to my point around implementations and integrations, is now much easier to reduce the time to go live. And that’s the time to value, and so. 

So no, I mean, I think AI is very much a big part of our strategy, and I think it’s a big reason why you’re seeing a lot of excitement about evaluating new technologies. I think you know the challenge is going to be around managing change management, especially as you move to the mid-market and enterprise levels. 

That’s insightful. Could you give some concrete examples of how AI is integrated into your strategy? Also, could you mention any areas where your team faces challenges or could enhance adoption? 

Carle Stenmark: Yeah. Our own team at VMG and how we’re implementing AI is very top of mind. So, our business is broken down into a few components, which is, you know, sourcing, which is basically finding and identifying the businesses that we want to invest in, diligence, which is then evaluating each of those opportunities, then it’s portfolio company support, and then ultimately exit and LP management. I think what we use AI the most is on sourcing and the top of the funnel. 

We listen to our ecosystem, which VMG has built over 20 years, to identify pain points that this consumer ecosystem is facing. That informs where we build thematic areas of interest. Once we’ve identified that thematic area of interest, that’s when, you know, we deploy AI to help us develop market maps and then ultimately start to filter down that type of funnel to the companies that we want to reach out to and have conversations with. 

Adoption is always tricky. Do you have specific strategies for helping your team get comfortable with AI and change management? 

Stenmark: Yeah, I think what we’ve instituted more recently is that, you know, carving out 45 minutes every week to do a show and tell.

It rotates between team members of showing how they’ve been utilising AI in a part of their workflow and what they’ve unlocked as a result, and so with anything, adoption is the key to success. How do you get greater adoption?

For us, it’s been team members showing what they’ve achieved with different tools and then encouraging others to kinda implement something. 

Do you see agentic AI having a meaningful role on the back-end side, like logistics, supplier relationships, or inventory planning? 

Stenmark: Yeah, I mean, I think there will be a role. I’m hesitant to, you know, go straight to agentic AI solutions for that. I think it needs to start with data capture because change management is very difficult and even adapting generative AI solutions, let alone agentic solutions, is hard. 

At the upper mid-market and enterprise level. And so what you need to achieve is early wins and shorter time to value for adoption, and probably starting with simple use cases that are able to extract and clean a lot of data. 

Over time, as you’re proving value, the organisation gets more comfortable with those agentic workflows. But I think in my opinion, at least in the near term, human in the loop is critical. It’s seeing how that works with the human in the loop. Then you remove the human for the agentic workforce. Still, hopefully by that time the buyer of that technology, who is the human, has found another role or value add that they themselves are able to unlock because that again. 

I think we’re running into the issue of, especially with big teams, a reluctance to adopt because people are frankly nervous about losing their jobs. And so I think you need to avoid that unless you’re going to a super top-down work for a back office where you’re kind of automating some really repetitive tasks with an agent. I think we’re starting to see that occur, but it’s after you’ve already built trust within the organisation that they’re able to then go to the agentic workflow. 

Looking at the broader consumer tech landscape, are there any overlooked supply chain or tech opportunities that you think are ripe for disruption? 

Stenmark: That’s a good question. I smiled. There’s just joking with a colleague that you know, during the last two years at Manifest, which is a big supply chain conference in Las Vegas, there have been more investors in attendance than founders or customers of technology. So I don’t think there are a lot of overlooked opportunities, to be honest, because I think somehow supply chain and operations technology has become surprisingly in vogue and hot within the investor landscape. 

Most opportunities we’re looking at, demand planning, inventory optimization, fulfillment optimization, logistics optimization, are well-trafficked verticals by investors. I think where we try to differentiate and have an edge is in successfully instituting change management. With AI, businesses can scale quickly with pilots, but moving from pilot to commercialization is where real value comes in. Yeah, like in vertical SAS, what, from your perspective, are the key characteristics that probably help the founders succeed compared to those in consumer-facing tech? 

So, when it comes to market mapping, do you have any rigid benchmarks that you follow closely, or is it more flexible depending on the situation? How do you approach this in practice? 

Stenmark: It’s pretty flexible. I mean, like I said, given we’re domain specialists, we like founders who have either strong domain expertise or a strong passion for the vertical or domain that they’re building in. That’s probably where we’re most maniacally focused. 

Other than that, it comes down to identifying great founders and understanding their target market. Do we like the characteristics of that end market? We do a lot in vertical software. We start more with the question: what is the vertical that the software needs to be built for? 

Within consumer services, you’re seeing a lot of private equity roll-ups in areas like car washes, med spas, and pet services. The reason is that those end markets have powerful unit economics and cash flows, so they have the dollars to spend on technology. When institutional capital is rolling them up, you also see more professional teams being built that are looking for tech solutions to find synergies and leverage. 

That makes sense. So in vertical software, how do these companies succeed compared to consumer-facing tech? Are there specific metrics or strategies that make a difference? 

Stenmark: For vertical software, those that succeed do an outstanding job of expanding their ACV, or contract value, by location or by account. Product velocity is really important. 

We only invest in founders with strong domain expertise who are obsessed with their end customers. They understand the business models that make that vertical tick. For example, in car washes, it’s memberships. In salons, it’s booking utilization, making sure seats are always full. 

Once you understand the key business metric for that vertical, the question becomes: how are you building solutions that drive as much success as possible in that metric? 

It’s about landing with a product that’s either very short time to value or the most critical component of that vertical’s tech stack. Then, gradually expanding modules and solutions. These are end markets with favorable cash flows, so they have the resources to continue spending on tech, especially as you deliver ROI. 

Got it. One challenge investors often see is feature creep, where founders keep adding new features, and the product becomes bloated. From your perspective, how should founders balance expansion with focus? 

Stenmark: Feature creep, it’s a good question.

My perspective is: you need an amazing wedge product first. Until you have a proven, repeatable go-to-market, where you can put more money in sales and marketing and predictably acquire new logos, you shouldn’t expand features. Avoid product creeps. 

You need something tangible enough to land. What’s interesting is that with AI, it’s now cheaper, faster, and easier to build compound solutions.

For example, Toast, a public company, took 14 years to build into an operating system for SMBs or restaurants. Now, competing companies are starting with all-in-one solutions from the get-go, incorporating POS, marketing, payroll, inventory, and compliance, all under one roof. 

The takeaway is to land with a strong core product for a predictable go-to-market, but expand quickly than ever before. Compound solutions are coming fast, and you want your customers to consolidate their tech stack with your solution. 

That’s a fantastic insight. Switching gears a bit, many of our readers are Gen Z founders or aspiring tech entrepreneurs. What advice would you give them? If you could give one or two key pieces of wisdom, what would they be? 

Stenmark: Most importantly, spend much time speaking to customers and understanding their workflows and pain points before you start building. That hasn’t changed over the years. 

Too many founders skip that step and build something just because they can, without realizing what the end market actually wants. 

Another important point now is that there are many top-down mandates to adopt AI. The natural inclination is to use buzzwords when selling solutions, but buyers will discount that, it just becomes noise. 

If you’re a Gen Z founder, focus on your product marketing: what problem are you solving and why? Is your product easy to use, implement, and configure for your end market? AI enables this but drop the AI buzzwords and focus on the value your product delivers, what AI allows you to do that wasn’t possible before. 

Great. One final question: For tech executives, like CTOs or CIOs, who are navigating rapid technological change, AI adoption, and global economic shifts. What is the one question they should be asking themselves right now? 

Carle Stenmark: 
It’s easy: How do I become both a CHRO and a CTO? My biggest challenge is change management. You have to adopt AI, or your organization will be left behind. It’s not a shortage of AI solutions; the issue is adoption. Many companies aren’t seeing ROI because they implement tools but don’t change workflows. 

It comes down to helping your organization adopt tools and change workflows to incorporate them fully. That’s where real value comes from.