Dive Brief:
- Ulta Beauty has launched Prisma Ventures, a digital innovation fund that will invest $20 million in technology startups, according to a press release from the company on Wednesday.
- Prisma Ventures, which was unofficially announced at Ulta’s 2021 investor day, has already “partnered with and invested” in several startups including Haut.ai, Adeptmind and ReStyle. It is focused on investments in augmented reality, metaverse, personalization, technology-powered custom beauty services, and more.
- Fund participants are able to leverage the retailer’s expertise and resources, gaining access to Ulta’s innovation team, consumer insights and market testing opportunities.
Dive Insight:
Ulta’s official launch of Prisma Ventures shows that the beauty retailer is betting big on technology.
“Launching Prisma Ventures is yet another way Ulta Beauty innovatively leads and delivers forward-thinking retail experiences. We believe this fund presents opportunities for creative disruptors to further propel the industry forward,” Prama Bhatt, Ulta Beauty's chief digital officer, said in a statement.
While the company says the fund is meant to advance the future of beauty and retail overall, it will work with appropriate partners to bring their technology to Ulta. The company noted that previous investments contributed to improved personalization and diagnosis for Ulta’s digital hair and skin services.
The news adds to an announcement in June that Ulta would support “early-stage BIPOC beauty brands” through its MUSE Accelerator program, providing resources, mentorship and time. Ulta joins a list of retailers who are fostering a community for new brands and innovators. Target, Sephora and Walmart have all launched beauty accelerator programs aimed at providing resources and mentorship to startups, some providing the chance to then sell through the companies.
Ulta Beauty performed well in its first quarter in contrast to others in the industry. Sales rose 21% year over year to $2.3 billion, with comps also rising 18% . That said, inflation has only worsened since the earnings report and online prestige beauty sales have dropped 14% year over year across the industry, according to a July report from 1010data.
