2024 Perspective for Beauty & Wellness Brands. FaB Miami ✨📈.
January 25, the first FaB meeting of the year!
A conversation with the founders and investors. Guest speaker Cristina Nuñez, GP and co-founding partner True Beauty Ventures, born and raised in Miami, and living here, sharing her enthusiasm about a fast-moving ecosystem!
A meeting co-hosted by Odile Roujol (Fab Ventures and founder of FaB global community, now 15,000 founders and investors, 19 chapters, 10k followers on social media) and Frank Bitoun, FaB chapter leader Miami, and early supporter of the movement.
The takeaway benefiting from the insights of an iconic VC within the Beauty and Wellness spaces, investing in brands.
2024 PERSPECTIVE and FUNDING:
“Exciting to see the acquisitions of K18 hair in Dec (Unilever), as an investor, the day after Dr Gross by Shiseido, then Barbara Sturm by Puig.”
“Cautiously optimistic. VCs are looking for liquidity to be able to return money to investments.
“Plan for the worst, hope for the best. Have discipline to build a brand. Un-natural growth expectations are gone. Think about what do you want to be in five years. Remember trends come and go.
Choose the investors that align with what you want to build!”
“It’s still tough out there. No investor gets excited by flat or decreasing growth. Be focused on being profitable, but still be appealing to them.”
“Start early, Funding takes a long time, raise a little more than you think”.
LEARNINGS FROM K18 HAIR FAST GROWING in 3 YEARS AND ACQUIRED BY UNILEVER:
(Fab Ventures and of course True Beauty Ventures did invest in K18 hair, before the round led by VMG Partners).
Cristina:
“Many founders ask me,- “What do I need to do”-? Building a brand takes time. I would underline 4 Things:
-Excellent product
-Differentiated brand and story telling
-Global Distribution
-Strong Execution
Products
K18 had one hero product and grew revenue to $100M+, with 7 products in less than 4 years.
Show strong value proposition. The product results and the efficacy, prove it. K18 hair had patented science, the peptide.
Brand.
At the same time, build the brand. Tell the brand story!
Excite people, and entertain them. It not just about the product and its efficacy. Need to tell a story that
Consumer can resonate with How do you “consumerize” science and technology. K18 hair did a great job on this with their education.
Growing on social media to Number #2 Tiktok in EMV in (Earned Media Value) , 11 billion plus views on Tiktok, it’s amazing.
Global distribution.
I always tell my brands to be relevant to your domestic market first then the international markets will want you.
K18 had 50 countries year 1 and, 100 countries by year 2, using professionnal channel distribution to drive growth.
Strong Execution
You need talent to grow the brand.
When it’s your Baby , your whole life, it can be difficult to let go. Having a great team, smart people is invaluable though. It’s hard to delegate. Let do people do their jobs. Productive distribution, productive assortment, efficient marketing… All that execution makes the magic happen.
K18, they had it all. Conversation insights:
Cristina’s advice: have a unique Brand, with a very differentiated positioning, that has organic traction and momentum.
Investors notice! They are reading everything, going to events, meeting founders.”
Odile adds to Cristina’s comments, the power of the community. Brands endorsed by experts.
The story of K18 hair powered by the hairstylists during Covid, a love story from day one.
The conversation by founders mentions that must have been a difference with Olaplex.
Science.
It’s not just marketing on instagram says Odile, you need the experts.
At the same time don’t raisemoney just for the R&D and science, you need to build the brand.
Consumers wants to know, they want some results. Product needs to work. Adds Cristina.
LIVE QUESTIONS & ANSWERS.
How do you choose brands you invest in?
Cristina mentions the 4 Ps:
-Positioning
-Product
-People
-Profitability
“Every investment is has those four elements! Great products makes you stay in the brand.”
Cristina gives the example of Youthforia in Miami.
“We spend a lot of time looking at the data. But we sometimes break our own rules!”
What Metrics do you look at as a VC focusing in the beauty space?
“look for proof points of product market fit.” How you show you have an engaged community, momentum in your business. How do you demonstrate organic traction?
KPIs overtime could be:
Traffic website
Aov
Ltv
Organic vs paid.
EMV of course as mentioned for K18 hair”. Says Cristina.
Bootstrapping vs VC money?
“You never want to miss a moment. Whatever category you are in, there are category tailwinds you can leverage, so you can hit the gas!
Or you get noticed by a retailer. Being on the shelves is a nice win, not yet success.
You want people able to guide you, with skills and expertise, able to connect you with the right people.
The Biggest one is don’t miss the right moment.
Still, you need to be smart on how much you are raising.” Says Cristina.
Luc Henry Roussel DC Advisory added to that, he knows founders who were successful, but it took them 20 years. “You will have to accelerate.”
Cristina adding: “As VCs, when a potential merger acquisition is on the table, we’re there to support founders, help answer questions, and get them ready for an exit.
Business Angels. How to find them.
“If you are not ready for institutional investors you can turn to angels. But Iit’s not very clear who are
these people are. I wish I had a list of Angels to share. Local networks can help for the connection to angels.” Cristina.
Retailers’ accelerators. Mentorship programs.
Cristina answers (part of the Muse program by Ulta): ”It depends on founder’s objective: If you want to be @ Ulta , — or Sephora, being in the accelerator can help for sure. You get access to the right people and resources.
Also helps founders build awareness and expand their network. Can help them raise money or refine a pitch deck.
Mentorship program: Through our Bridge Mentorship program we can really get to know founders, spending 5 months together. — We will know the founder is collaborative, how do they react to feedback, and what motivates them as a founder.
Beautytech and Customization.
“You can grow D2C business, then omnichannel. We are not investing in beautytech yet, but getting more familiar with that type of business model.” Cristina
Makeup and color matching. Odile adding that for corporations, it’s an enabler and then not crazy multiples.
Corporations look for GenZ and Millennials customers, new brands, as global ones have an average age of 40 plus.
Sustainability in the beauty industry.
“Very important but a product attribute. Even GenZ who are sustainability conscious, the product has to be good.
You can’t sacrifice the experience and the results. True Beauty Ventures did focus groups in the fragrance category, it was all about the juice, the quality, being long lasting, then the bottle itself. Gen Z loves the brand to have a mission.”
Market places.
Andres @ Ettos mentions his investors in the US (Latam market place, founded in Columbia). Launching soon their own brand.
Odile adding that Thirteen lune in the US did the same, with Relevant brand, now launched in the UK too. Founders mention Faire.
Miami:
“Miami is the next beauty mecca!’ TROY ALEXANDER Founder / CEO TROY Skincare For Men
“It’s the next hot hub. Most of my deals come from Miami, NYC, and L.A.”
“There are not a lot of consumer investors, a lot of tech VCs, growth stage. Some PE firms such as L Catterton.
The toughest part is do you want your office here or do you accept remote work. Miami is expensive to live in. Most of the beauty talent is still in NYC and L.A.”
“Junior team need guidance. Then you need to travel to them, have the touch points.”
Frank Bitoun adds on Why should you chose Miami to establish or develop your business:
- fastest Tech growing hub in US, especially in FinTech, Crypto and BioTech. B2C is emerging bigtime.
- highest concentration of banks in US and many investment firms moving or creating an office here.
- world-class transportation connectivity.
- the most diverse and fast-moving entrepreneurship hub in US.
- booming migration to Florida (since Covid) due to lifestyle and tax benefits.
- the hub from and to Latam!
Thank you Cristina for sharing your time and insights.
If you want to join the next meetings and conversations follow us on social media, with local linked in pages.Be part of the Global linked in group, and subscribe to the newsletter, it’s free and quarterly: https://www.beautytechcommunity.com/
Odile and Frank
The meeting was hosted by Fab Ventures, seed stage, Sustainable Fashion and Conscious Beauty, if you want to know more about the founders in the portfolio Fund I and II: https://www.fabcocreationstudio.com/
