Dive Brief:
- Luxury beauty buying club Beauty Pie has raised $100 million in a Series B financing round, bringing its total funding to date to $170 million.
- Leading the round were Index Ventures and Insight Partners as well as existing investors Balderton Capital, General Catalyst and Latitude VC.
- With the funding, Beauty Pie said in a press release it is planning more warehouses, pop-up shops and a new membership model.
Dive Insight:
Founded in 2016 by Marcia Kilgore, Beauty Pie takes the pay-for-discounts club model to beauty products.
The company says it is the first buyers club in the sector, describing its self as "Netflix, but for super-high quality beauty and wellness products." You could also liken its model to that of Sam's Club or Costco, but limited to the beauty and health categories.
Members pay a monthly ($15) or annual ($59) fee. Members can then buy products, with monthly spending limits, at what the company advertises as steeply discounted, warehouse-style prices compared to what they would fetch in traditional retail stores. (Beauty Pie says it audits those retail prices regularly.) It sells skincare, makeup, haircare, bodycare, candles, fragrance, accessories and nutritional supplements, sourced from third-party labs and suppliers.
During the pandemic, Beauty Pie went through "exponential growth" with the acceleration of direct-to-consumer shopping, the company said. In its fiscal 2021, it doubled the number of members.
Beauty brands have been on the hunt for capital as they try to expand their reach in a competitive market. Glossier this summer announced a new, $80 million funding round to support its latest brick-and-mortar effort. The DTC brand plans to scale both its online and physical presence, with "dozens of new stores" planned in the U.S. and abroad in the coming years.
Haircare brand Olaplex recently filed papers for an initial public offering that would bring in new capital while keeping voting control with its private equity backers. The company, which says its products are "science-backed," targets the professional market while also selling through its own DTC channels and at retailers, including Sephora and Amazon. Olaplex's sales have shot up quickly, to $270 million in the first half of 2021 after making $282.3 million for all of 2020.
As for Beauty Pie, its funding round brought in some investors experienced in the retail space. Index Ventures has funded U.K.-based food delivery specialist Deliveroo and online luxury apparel platform Farfetch. Insight Partners this year invested in the digital versions of Saks Fifth Avenue and Saks Off Fifth.
