Dive Brief:

• Searching for expansion, DTC brand Function of Beauty announced Wednesday that it has acquired Atolla, a personalized skin care company.

• Both companies are focused in the customized beauty space: Function of Beauty began as a personalized hair care brand, and Atolla gives consumers tailored formulations and skin care regimens based on a patented at-home skin care test, according to a company press release.

• Function of Beauty had already launched into the personalized skin care market with an offering of "over 3 billion possible formulations." The acquisition of Atolla will allow it to use the company's data-driven product recommendation system and skin care test to improve its own offerings, with a new skin care offering set to launch in Q1 next year.

Dive Insight:

As DTC brands grow beyond their initial stages, many are on the lookout for their next phase of growth, whether it's an IPO or, in Function of Beauty's case, an acquisition to expand its reach.

Founded in 2015, co-founder and CEO Zahir Dossa has been on a mission from the beginning to expand access to personalized beauty products. "It's an industry that we think could have an insane amount more specialization and personalization for any single person," Dossa told Retail Dive in 2019. "I don't think it's a niche problem. I think it's a mass market problem that wasn't able to be addressed largely from a technological perspective."

Now, Function of Beauty touts its hair care products as "the most advanced offering of customized haircare to date on the market," and the brand has set its sights on changing the skin care game next. Personalized skin care is one of the up-and-coming trends in the beauty space, with many companies playing around with how to reach consumers with customizable products.

Proven, an AI-based customizable skin care brand, made "multi-million dollar sales" after appearing on (and being rejected by) Shark Tank. The company has raised $6 million to date, according to Crunchbase. Heyday, which emphasizes a personalized approach to skin care through data and the expertise of licensed estheticians, raised $20 million in February with plans to open hundreds of stores. And more established players like Clinique and Shiseido have also engaged with the trend.

"With the acquisition of Atolla, Function of Beauty now has the ability to offer the world's most advanced skincare system — one that is truly personalized to every single customer through the combination of our groundbreaking manufacturing technologies and Atolla's patented skincare system," Dossa said in a statement. "Function of Beauty is striving to revolutionize the beauty industry by making personalization the new norm, and this is one step further to make that vision a reality."