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

The consumer technology industry is at an inflection point. Artificial intelligence, automation, and the rise of vertical SaaS are remaking how brands build, market, and sell. Still, 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. Carle Stenmark, General Partner, VMG Partners, and guide of VMG’s technology-focused strategy, has been thinking about that question for years.

He leads the firm’s technology strategy with a rare mix of financial discipline and human instinct. A former entrepreneur, Mr. Stenmark is as focused on relationships as he is on returns, approaching each partnership with curiosity, optimism, and an eye for long-term trust.

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

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 positively contribute to their markets, it’s a victory for investors and the communities and consumers they serve. 

In this conversation, Carle shares how he spots opportunities 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 is, 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. I’ve been with the firm for a decent amount of time. I started 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 had on the consumer ecosystem.

I was more excited about that impact in the future and how it would change the landscape of both CPG and retail. Thus, I worked with our existing investors or LPs to launch a new strategy within VMG, which we’re now calling VMG Tech. The premise is to find disruptive technologies that broadly impact the consumer ecosystem, particularly brands and retailers, helping them scale faster and more profitably and delivering better experiences to their end consumers. 

That’s fascinating. It sounds like technology really reshaped your focus. I’m curious: What inspired you 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, maybe taking a step back to when I joined VMG, we’re very involved with the portfolio companies that we invest in.

I joined in 2012, and at the time, the tech stack really consisted of the ERP system. I saw firsthand how this was evolving with the advent of social media, which was changing martech significantly. Then, Amazon and Shopify changed a lot of the routes to market, and eventually, there were more and more supply chain disruptions, which required the adoption of technology faster and faster.  

I was working closely with the founding teams of our consumer businesses and saw firsthand how they struggled with the rapid evolution of supply chains and increasing supply chain disruptions. Social media and e-commerce demand were moving with trends faster and faster, so all of the portfolio companies I was working with were struggling with how to best balance supply and demand in a cash and margin-effective way that delights all stakeholders. The solution to this is technology. That excited me 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 exceptional founders with strong domain expertise that can impact fundamental 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 you’ve alluded to and 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 the consumer end market is more willing 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, it’s inevitable. Everything that we look at has AI as a component of the business, whether it’s an AI native business or whether the engineering teams are 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. 

AI is a big part of our strategy, and it’s a big reason there is so much excitement about evaluating new technologies. The challenge will be managing change, especially as we move to the mid-market and enterprise levels. 

That’s insightful. Could you give 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? 

Stenmark: Yeah. Our team at VMG and how we’re implementing AI are at the top of my mind. So, our business is broken down into a few components: sourcing, basically finding and identifying the businesses that we want to invest in, and diligence, then evaluating each of those opportunities. It’s portfolio company support, and then ultimately exit and LP management. We use AI the most for sourcing and at the top of the funnel. 

We listen to our ecosystem, which VMG has built over 20 years, to identify pain points that our 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, 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 carving out 45 minutes every week to do a show-and-tell.

It rotates between team members showing how they’ve utilized AI in their workflow and what they’ve unlocked. As 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 encouraging others to implement something. 

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

Stenmark: Yeah, I think there will be a role. I’m hesitant to go straight to agentic AI solutions for that. It needs to start with data capture because change management is challenging, and even adapting generative AI solutions, let alone agentic solutions, is complex. 

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

Over time, as you’re proving value, the organisation gets more comfortable with those agentic workflows. But, at least in the near term, humans in the loop are critical. It’s seeing how that works with the human in the loop. Then, you remove the human from 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 can unlock because of that again. 

We’re running into the issue of a reluctance to adopt, especially with big teams, because people are frankly nervous about losing their jobs. You need to avoid that unless you’re going to super top-down work for a back office, automating repetitive tasks with an agent. We’re starting to see that occur, but after you’ve built trust within the organisation, they can go to the agentic workflow. 

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

Stenmark: That’s a good question. I was joking with a colleague that during the last two years at Manifest, 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 somehow supply chain and operations technology has become surprisingly in vogue and hot within the investor landscape. 

Most opportunities we’re looking at, such as demand planning, inventory optimization, fulfillment optimization, and 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.

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. 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 vertical needs the software 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, more professional teams are being built that are looking for tech solutions to find synergies and leverage. 

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

Stenmark: Vertical software companies that succeed do an outstanding job of expanding their ACV, or contract value, by location or account. Product velocity is significant. 

We only invest in founders with strong domain expertise 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 end markets have 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 that you need an amazing wedge product first. Until you have a proven, repeatable go-to-market, where you can invest 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 quicker 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 a lot of 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 wants. 

Another critical point is that many top-down mandates exist to adopt AI. The natural inclination is to use buzzwords when selling solutions, but buyers will discount that; it 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. 

Thank you, Carl, for taking the time to share your insights; they’re incredibly valuable.

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? 

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.