Beauty Investors — VC Firms and Angel Investors to Know

Within the consumer goods sector, beauty is considered the fastest-growing category. The beauty industry was worth $320 billion in retail sales in 2018 and is expected to grow by $1 trillion over the next few years. With the rise of the beauty space, investors have been paying close attention to identify new trends and investment opportunities.

Why Have VCs Been Hesitant in Investing in the Beauty Industry?

Before technology disrupted the industry, the main focus of beauty brands was to create an innovative product. However, creating brand awareness or promoting a new product’s benefit was very stagnant. Especially for small and new brands, it was difficult to reach customers without having to spend a high budget on traditional marketing like TV commercials, billboards or newspaper ads. Today, Instagram and Facebook enable beauty startups to launch effective digital marketing campaigns that fit a tight budget.

Beauty firms effectively leveraging social media as a promotional tool (src:

Additionally, beauty has always been a more female-oriented industry. Products were targeted towards the female consumer base which is why the industry hasn’t really been on men’s radar. A survey done by CB Insights shows that 92% of VC partners and firms in America are led by men. For them, it was hard to see the value in a product or service they couldn’t relate to which is why there wouldn’t be many investments into it.

Since the beauty industry is expected to reach a market value of $800 billion by 2023, investors can’t afford to ignore the huge potential that this sector has to offer any more.

Beauty Investors on the Rise

Technology has been the driving factor in the rapidly growing beauty industry. AI allows customers to have a more personalized experience. Services that use AR let users try on makeup through their phone cameras and increase customer convenience. Moreover, social media creates consumer intimacy. On the one hand, consumers feel more connected to a brand through colorful Instagram or TikTok posts, on the other hand, brands can learn more about customer opinions through online reviews, social media posts or blogs.

With the help of a beauty app brands can offer a more personalized consumer experience (src:

While technology is shaping the industry, content creators and influencers on social media are driving the growth towards it. GRWM videos, “Selfie Culture,” Beauty Tech, and other major trends have helped sales in the industry boom. As younger generations are very technology-driven, brands can reach a broader audience. At the same time, social media gives groups that were under-represented in the past (i.e. people of color, men, etc.) a voice which is why more niched brands like Fenty Beauty are rising. Technologies allow brands to reach a higher degree of personalization and a deeper understanding of unmet consumer needs.

These factors have accelerated the industry’s growth which is why the beauty sector is getting more on the PE/VC’s radar.

PE/VC Firms That Invest in Beauty Startups

Forerunner Ventures

Forerunner Ventures is an early-stage venture capital firm based in San Francisco, California that focuses its investments on e-commerce businesses. The company is often named as one of the most prolific and successful venture capitals in the consumer industry as it has invested in reputable beauty brands early on.

Portfolio examples:

  • Glossier — a digitally native beauty brand every millennial knows about. Glossier is the success story of a beauty startup. The founder Emily Weiss started the company by turning her blog “Into the Gloss” into a startup. Back then she had a tough time seeking her first funding until she met Forerunner’s CEO Kirsten Green who supported the business with its first seed investment. Glossier has now a $1.2 billion valuation.
  • Dollar Shave Club — a men’s grooming brand that sells razors for $1. The company is well known for its viral commercial that was produced on a $4,500 budget and turned the company into a billion-dollar company within 4 years.
  • Curology — prescription skincare that is customized by dermatologists and sold directly to consumers. The company was founded by dermatologist David Lortscher, M.D., and received $17 million in VC funding from multiple investors, including Forerunner Ventures.
Beauty startup “Glossier” launched in 2010 and disrupted the industry with a new level of personalized content (src:

Female Founders Fund

Female Founders Fund is a VC firm that focuses on women-led startups in e-commerce and web-enabled products and services. The VC’s mission is to support female entrepreneurs and help them realize their innovative ideas. Sutian Dong, one of the fund’s founders, believes that “Women control trillions of spend worldwide” and that “industry-defining companies of tomorrow are being started by founders who intuitively understand the modern consumer, her needs, and her impact on how businesses do business.”

Portfolio examples:

  • Billie — a female-focused lifestyle brand that provides women with premium body care and shaving products. Billie was able to receive several funding rounds from the Female Founders Fund and secured $25 million in a series A round by Goldman Sachs Private Capital Investing Group.
  • Winky Lux — a cruelty-free and toxin-free beauty brand that offers high-pigment color makeup at relatively affordable prices. The brand’s innovative manufacturing cycle and “fast-beauty” concept got them a $2 million seed round from the Female Founders Fund in 2017 and an additional $6 million series A round from multiple investors in May 2018.

SoGal Ventures

SoGal Ventures is the first female-lead millennial VC firm that has invested in over 60 startups. They invest in startups with at least one female co-founder and startups that target the millennial women market. The idea is “to bring young women together, get them exposure to entrepreneurship and role models, and to support one another to live on our own terms,” says Pocket Sun, Founder of SoGal Ventures.

Portfolio examples:

  • Function of Beauty — a company that creates personalized shampoos and conditioners. The company let customers take a quiz to learn more about their hair conditions. Based on the answers an algorithm works out which ingredients at which concentration should be used. The company received a $9.5 million financing in February 2018 for its series A round from SoGal Ventures, Y Combinator, and others.
  • Winky Lux (mentioned above)

Angels and Early-Stage Investors That Invest in Beauty Startups

Theresia Gouw

Theresia Gouw is the founder of Aspect Ventures. By the time she was working at the VC firm “Accel Partners”, she played a major role in the early investment into Birchbox — a retail platform to discover makeup.

Portfolio example:

Birchbox — a beauty startup founded in 2010. The company is considered as the pioneer of beauty subscription boxes. With over millions of subscribers, the startup reported a $485 million valuation, in just under four years.

Birchbox is a prominent example of Accel Partners’ company portfolio (src:

Tina Bou-Saba

Tina Bou-Saba has made over 20 angel or pre-seed investments in consumer companies focused on beauty/health, specialty apparel, and consumer technology. She is a strategic angel investor in beauty and other consumer verticals.

Portfolio example:

Volition Beauty — a beauty brand that lets customers co-create ideas for the brand’s products. The company has not only a unique way of involving its consumers, but also bases its ingredients on clean formulation standards.

Alicia Syrett

Alicia Syrett is the Founder and CEO of Pantegrion Capital, an angel investment firm that focuses on early-stage startups. She was named as one of the “25 Angel Investors in New York You Need to Know.”

Portfolio example:

BeautyBooked — is a premier digital booking platform for scheduling beauty services. It was referred to as “the OpenTable for salons” by The New York Times and provides 24/7 access to the best salons and spas. The company got acquired by StyleSeat for $40 million in 2016.

What Do Beauty Investors Look at When Investing?


When it comes to consumer goods, branding and consumer engagement play a major key in a company’s growth. Beauty Investors are especially interested in companies that can build a strong online consumer base through their brand stories. Glossier is the perfect example of how a brand capitalized on digital marketing strategies to build a loyal customer base. More and more beauty conglomerates recognize this trend and acquire beauty startups that have a greater connection with millenials and younger generations via online channels. By telling the right story, brands can connect to their consumer on a deeper level and accelerate at a much faster rate. Purchases are not only about the product anymore, but also about the brand’s purpose.

Trend Potential

The beauty market is getting more and more saturated with similar products and services. Therefore, companies need to stand out in order to win over Beauty Investors. Startups need to have a deep understanding of the market to foresee industry trends and implement them early on. Companies that know their consumers and cater to their needs, not only have a more engaged, but also more loyal follower base.

Some of the trends that have taken over the industry include:

  • Transparency — Today’s consumers care more about sustainability and eco-friendliness than they have ever before. It’s a trend that not only affects upcoming startups but also large beauty brands as consumers are getting more interested in natural and organic ingredients.
  • Customization and Personalization — Brands like Function of Beauty and Curology are becoming so popular because customers can decide what goes into their products and create their very own versions of it.
The startup “Function of Beauty” offers customized haircare products (src:

Investments Into Beauty Startups Will Not Slow Down in 2020

VC/PE firms and angels are all looking to invest in an industry with long term growth potential. The beauty industry is a hot investment field because it has already shown promising growth over the last few years. As the influence of social media on consumers is at an all-time high and still rising, there are increased opportunities for product marketing and promotion. Moreover, new technologies like AI, big data, and blockchain lead to a closing gap between beauty and tech. Those developments are promising drivers of the continuous growth of the beauty sector. This outlook leads to more investments that will further fuel beauty innovations in categories such as skincare, cosmetics, beauty apps, and devices.