LONDON — Beauty patrons’ membership Beauty Pie has closed a second spherical of funding totaling $100 million that was co-led by Index Ventures and the U.S. non-public fairness agency Perception Companions.
Having confirmed that its mannequin works — the enterprise operates with a direct-to-consumer, membership mannequin that enables it to supply subscribers accessible costs for luxurious skincare and cosmetics — Magnificence Pie is now seeking to scale its attain and experiment with bodily retail, new membership fashions and product classes.
“We’re totally different from a whole lot of the [direct-to-consumer] start-ups that simply form of blow money. We’ve damaged even already. So having confirmed that our mannequin is one that may make a revenue, whereas nonetheless bringing this unbelievable worth to clients, now it’s nearly increasing that out,” asserted Marcia Kilgore, founder and chief government officer at Magnificence Pie.
The corporate has been seeing regular gross sales development all through the final yr, a lot in order that it generally needed to flip its advertising off as a result of stock was operating out too quick. Now, with new funding in hand, the corporate will be capable to broaden into new warehouses and purchase extra stock.
“As we get bigger, we simply get higher. Due to economies of scale and what they’ll do in your product pricing and the worth that they’ll carry to the client, the extra members that we get, the better the worth proposition turns into for everybody,” mentioned Kilgore, including the brand new funding was a “vote of confidence” from traders but in addition a technique to obtain the dimensions the corporate is striving for quicker.
“Whereas we weren’t essentially pondering, ‘Oh, we should always go elevate cash proper now,’ as a result of we nonetheless had numerous our Sequence A cash left within the financial institution, we realized that with the ability to soak up an enormous new funding would assist us step on the fuel. If we wish to broaden, that stock needs to be sitting within the warehouses,” she mentioned.
The Sequence B spherical brings Magnificence Pie’s whole funding thus far to $170 million.
“Magnificence Pie delivers enormous worth to its clients, demonstrated by distinctive member loyalty over a few years. It’s a mannequin that marries trade disruption with buyer obsession — a successful mixture,” mentioned Danny Rimer, accomplice at Index Ventures.
Kilgore’s final ambition is to develop Magnificence Pie right into a Costco of types for luxurious magnificence — providing comfort and something ladies’s hearts need relating to the world of magnificence, from razors to silk hair ties, top-quality dietary supplements and splendid hyaluronic acid serums provided at drugstore value factors.
The corporate made its first foray into dietary supplements final yr and has seen success up to now. The class is ready to launch within the U.S. round November, alongside two new dietary supplements and gummies, which Kilgore describes as “an unlimited space for development.”
Loungewear, convenience-based equipment like razors or nail recordsdata, and plastic-free toothbrushes are within the works.
“All these sorts of equipment and luxurious objects that you simply usually possibly wouldn’t be capable to afford have been extremely good for us and repeat. So we’re taking a look at these accent comfort objects, anything that may be a luxurious pampering product,” mentioned Kilgore.
Taking a look at bodily retail can also be a part of the corporate’s development system, following a single but extremely profitable pop-up expertise at Harvey Nichols held shortly earlier than the outbreak of the COVID-19 pandemic.
“It was simply 4 days and we have been mobbed. It was actually enjoyable as a result of we acquired to fulfill the those who we speak to on social media all day. All of them got here to check and contact and odor and meet everyone. It was like an enormous group journey. As an experiment, it simply confirmed that, in fact, there’s nonetheless a spot for retail. And it needs to be I take into consideration leisure and schooling,” mentioned Kilgore, who’s maintaining an open thoughts as to what the precise retail format for Magnificence Pie will appear to be.
“It could possibly be a pop-up or it could possibly be a flagship. It’s simply one other technique of educating individuals what your model is about and buying new members. We do actually love the concept of one thing just like the Museum of Ice Cream. How can Magnificence Pie be just like the Museum of Ice Cream, so that folks can are available in and actually expertise how cosmetics are manufactured? I’d like to experiment with issues like that as a result of for ladies, the concept of being a child in a sweet shop is definitely extra about going and smearing physique butter throughout themselves.”
The corporate is starting to supply new yearly membership fashions to permit clients to shop extra and ship much less, free from the spending caps of its preliminary month-to-month membership mannequin.
“After we first launched, we had no concept how a lot stuff individuals will purchase each month and had a restricted quantity of stock. We simply needed to be sure that individuals wouldn’t are available in for one month after which stop, so it was actually essential for us to restrict how a lot individuals may purchase each month. However we realized after some time, with totally different checks, that individuals who weren’t constricted by these limits have been shopping for much more and in lots of circumstances delivery rather less typically. So now that we are able to purchase much more stock we are able to enable individuals to shop for no matter they need, which is extra consistent with how individuals are used to purchasing at retail,” defined Kilgore.
The membership prices $59 a yr with members then receiving a $3,600 spending allowance upfront. It’s already obtainable within the U.S. and shall be rolled out globally later within the yr.
“It’s additionally simpler to grasp how the membership works. I believe there’s precedent by way of pay X per yr and watch no matter or purchase no matter. Costco has that form of membership membership, or with Netflix you realize that you simply pay X monthly and you may watch no matter,” mentioned Kilgore.
“After the entire COVID-19 expertise, you form of should be extra accountable and take into consideration your influence on the world — and your finances, too. Folks actually recognize with the ability to get it at that insider value that makes it just a little little bit of a splurge nevertheless it’s actually a steal.”
https://wwd.com/business-news/monetary/beauty-pie-raises-100m-series-b-funding-1234909932/ | Magnificence Pie Raises $100M in Sequence B Funding – WWD