Venture capital firm Venrex and industry body the British Beauty Council jointly announced on Tuesday the launch of a new fund for UK-based beauty companies.
The fund will target companies that make products for consumers, as well as companies that make solutions for enterprises, such as packaging, software and supply chain companies.
Venrex has previously invested in beauty companies including cosmetics maker Charlotte Tilbury & Vieve and skincare brand Disciple. The British Beauty Council will act as a conduit and introduce Venrex to companies for consideration.
Focusing on early-stage companies, the average check size ranges from $130,000 to $1.3 million. Company co-founder Marc Esiri said Venrex plans to invest between $6 million and $26 million in early-stage beauty companies over the next few years, so more funding will become available after that. He said it is possible.
Millie Kendall, chief executive of the British Beauty Council, said: “We want brands that enable a vibrant business ecosystem – brands that are sustainable and fair.” She added that beauty companies are a key focus.
Kendall said her industry experience, which includes co-founding multiple beauty companies including cosmetics line Ruby & Milly and e-tailer Beauty Mart, drove home the need for an industry-specific B2B provider. and cited the development of sustainable packaging and supply chain management. Two areas that can hinder growth.
“I think a lot of investment funds are just looking for[breakout stocks]. There’s nothing wrong with that,” she says. “But I want to support not just brands, but outstanding and diverse founders and businesses.”
Many investors are deprioritizing consumer categories as increased competition and a slowdown in business models that rely on digital advertising make growth and scale difficult. Esiri believes that the right business will succeed. In an email to The Business of Beauty, she said the market is “huge and resilient” and driven by a consumer base willing to pay for quality and innovation.
“People who are determined to build breakthrough companies rarely stop to consider single-digit changes in the macroeconomic environment,” he said.
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