As recently as 2018, PitchBook reported that 96% of traditional brick-and-mortar beauty retail channels were controlled by the top 20 cosmetic manufacturers. On the flip side, 86% of ecommerce channels were controlled by companies outside of the top 20 per Nielsen. Suffice it to say, ecommerce beauty startups are dominating the direct-to-consumer sales and subscription services, and venture capitalists have taken note.
More specifically (and recently), 2021 was a big year for beauty—both in deal count and amount invested. Across 252 deals in the beauty vertical in 2021, capital raised reached $2.69 billion—up from 2020’s total of $1.15 billion. 227 beauty startups received backing in 2021, and the median deal size was $2.75 million.
But what firms are investing in beauty and skincare?
Top firms investing in beauty and skincare startups
Founded in 2017, Imaginary Ventures is a consumer-focused VC firm based in New York. The firm seeks to invest across different categories in the ecommerce space, including retail, fashion, lifestyle and beauty. The firm invested in Glossier, a beauty brand with a skincare-first philosophy that intends to emphasize and celebrate natural facial features. Imaginary Ventures has also invested in Kosas, Bread Beauty Supply and Ami Colé.
Forerunner Ventures is an early-stage venture capital firm that invests in the ecommerce, software and retail sectors. It was founded in 2010 and is based in San Francisco, California. Forerunner Ventures has invested in Curology, an online dermatology service that offers customized skincare treatment plans and products. The firm has also invested in Glossier, Prose, Birchbox and Dollar Shave Club.
Greenspring Associates is a global investment firm based in Owings Mills, Maryland. The firm invests in established and emerging VC fund managers, expansion stage venture-backed firms and secondary investments in venture capital funds. The firm invested in RealSelf, an elective cosmetic treatment platform designed for people to learn about cosmetic procedures, share experiences and connect with top providers. Greenspring Associates has also invested in Glossier, Colorescience and SkinMedica.
Founded in 2010, 500 Global—formerly called 500 Startups—is an accelerator and VC firm headquartered in San Francisco. The firm seeks to make minority seed, early-stage and later-stage investments in startups across a range of industries. 500 Startups has invested 28 times into beauty companies, including Cairo’s Source Beauty, an ecommerce platform offering beauty products from Egyptian and international brands. The firm has also invested in Bespoke Post and Raw Apothecary.
Menlo Park’s Khosla Ventures is a venture capital firm that makes investments in early- and late-stage companies. Founded in 2004, the firm has invested in NakedPoppy, an online platform that rigorously screens beauty products and maintains a list of known or suspected toxins that are harmful to skin. They also vet and test products to provide curated clean beauty brands that would be perfect for consumers.
Founded in 2000, Funk Ventures is an early-stage impact investing and acceleration firm headquartered in Los Angeles, California. The firm seeks to invest in the healthcare, wellness, medical technologies and cleantech sectors based in Southern California. The firm has invested in Every Man Jack, a manufacturer of skincare products designed to offer simple, affordable and high quality grooming products for men.
Goodwater Capital is a venture capital firm based in Burlingame, California. The firm was founded in 2014 and seeks to invest in early-stage consumer and technology companies. It has invested in Scentbird, a fragrance subscription service designed to revolutionize the way people shop for perfume and cologne.
Headquartered in Mountain View, California, Y Combinator is an accelerator that funds early-stage startups. Founded in 2005 and actively seeking new investments, the firm invested in Function of Beauty—a New York-based beauty brand that offers customized haircare, skincare and bodycare products—in October 2021. Y Combinator has also made investments in Coral, Proven and Scentbird.
Founded in 2013, 645 Ventures is a venture capital firm based in New York. The firm invests in early-stage startups and seeks to invest in software as a service (SaaS), consumer, infrastructure and security sectors. 645 Ventures invested in Beauty Bakerie, a Black-owned cosmetics company featuring a line of cruelty-free, vegan and long-lasting makeup products wrapped in packaging inspired by baking and desserts. They’ve also invested in Bespoke Post, a subscription-based collection of men’s lifestyle products.
Harlem Capital Partners
Founded in 2015, Harlem Capital Partners is a venture firm based in New York. The firm prefers to invest in early-stage companies and reserve capital for investments in minority and women founders in the United States. The firm has invested twice in Lumin Skin, a skincare line for men including anti-wrinkle, dark circle and age management solutions.
Innovation Global Capital
Innovation Global Capital is a San Francisco-based venture capital firm that seeks to invest in fashion, beauty, food and consumer technology. Founded in 2013, the firm has invested in Alchemy 43, an operator of cosmetic injectable clinics intended to bridge the gap between the medical aesthetic and beauty industries. Innovation Global Capital has also invested in organic cosmetic brand Kjaer Weis.
Headquartered in Palo Alto, California, Cowboy Ventures is a venture capital firm that invests in early-stage enterprise and consumer-oriented startups. Founded in 2012, the firm recently invested in Matter of Fact, a seed-stage skincare company based in Los Angeles. The firm has also made invested in Brandless, Novi and MBX.
Founded in 2010, Lerer Hippeau is a venture capital firm based in New York. The firm seeks to invest in companies operating in the consumer, digital media, ecommerce, emerging tech, and enterprise software sectors. Lerer Hippeau has invested in Prose, a haircare product line that customizes each formula to the customer based on their scalp needs, goals, lifestyle habits and environmental exposure. The firm has also invested in Heyday, Glossier and Birchbox.
Founded in 2014, BBG Ventures is an early-stage venture capital firm based in New York. The firm makes investments in consumer-focused startups with a female founder and prefers to invest in internet and consumer tech, media, and consumer products sectors. BBG Ventures has invested in RadSwan, a company that offers hair extensions, wigs and accessories for Black women with natural hair. The firm has also invested in Mented Cosmetics.
Female Founders Fund
Founded in 2013, Female Founders Fund is a venture capital firm based in New York. The firm specializes in startups and early-stage investments and invests in women-led startups operating in the ecommerce, IoT and marketplaces and platforms sector. The firm has invested in Billie, a lifestyle brand intended to provide consumers with quality shaving supplies and premium body care products.
Brand Foundry Ventures
Founded in 2014, Brand Foundry Ventures is a venture capital firm based in New York. The firm calls itself “a consumer-only venture fund” and prefers to invest in early-stage companies and help them grow into household names. It works to amplify brands through building relationships with micro-influencers. Brand Foundry Ventures has invested in skincare company Starface, which developed a line of hydrocolloid acne stickers intended to help, protect and heal blemishes.
Founded in 2015, Beliade (formerly known as M3 Ventures) is an early-stage investment firm based in New York. The firm prefers seed-stage investments and seeks to build relationships with disruptive consumer startups in the U.S. Beliade participated in the seed round for Isla Beauty, a performance beauty brand that is aiming to blur the lines between skincare and makeup. The firm has also made investments into Ceremonia, Heyday and Kosas.
Founded in 2019, Sekhmet Ventures is a venture capital firm based in Portola Valley, California. It focuses primarily on investing in companies with science-based products in the beauty and wellness markets. The firm has invested in Codex Beauty Labs, a biotech company that blends the sciences of ethnobotany and plant biology to create beauty products that support the microbiome and provide meaningful skincare. Sekhmet Ventures has also invested into Young King Hair Care.
More about beauty and skincare
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Find out why VCs are pouring money into beauty brands
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Get to know these impressive female founders—including a handful in beauty and skincare
Read our blog post about female founders and investors to know
Get to know 10 VC-backed clean beauty brands that are creating buzz
Check out our blog post featuring Every Man Jack, Ilia and others
*The data included in this article is accurate per PitchBook data as of January 10, 2022; data is subject to change frequently