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The beauty industry had a banner year in 2021. Deal volume was up 31% compared to 2020, with 298 deals and $2.94B raised from venture capital alone. Investment tapered off in the first half of 2022 at just under 100 deals, but beauty continues to draw attention from venture capital firms as the sector-at-large grows by embracing technology and social media to sell products.
 

Total investments in beauty since 2017

    

A closer look at the beauty industry landscape

The beauty industry has evolved from a concentration of traditional brick-and-mortar retailers, controlled by a handful of cosmetics manufacturers, to smaller e-commerce businesses dominating the landscape with all-natural and customizable products sold directly to consumers.

Beauty industry quick stats

 
Consumer demand has paved the way for a dramatic increase in the number of sustainable, cruelty-free, natural and organic product lines. Startups responding to the growing lifestyle of health and sustainability (LOHAS) demographic to watch include Gwen Stefani’s GXVE, Green Forest Wellness and Brown Girl Jane. Companies like Prose and Ellis Brooklyn are meeting the demand for more personalized fragrances, skin care and makeup products tailored to meet individual consumer needs and preferences. Subscription-based beauty boxes like Ipsy, Birchbox and Fab Bag continue to flourish.

But which US VC firms are investing in beauty and skincare? Let’s take a closer look.

Top US venture capital firms investing in beauty and skincare startups

True Beauty Ventures

Founded in 2020, True Beauty Ventures is an emerging growth investment firm with offices in Miami and New York. The firm focuses exclusively on the beauty, wellness and personal care industry. It’s invested in Crown Affair, maker of healthy hair products with compostable packaging; Cay Skin, which makes silicone-free, vegan, cruelty-free, reef-friendly, and dermatologist-tested skin care products; and Kinship offering clean and cruelty-free skincare products.

Stage 1 Fund

Stage 1 Fund is a venture capital investment firm founded in 2019 and based in Anaheim, California. The firm’s investments are primarily in ecommerce, business and consumer products and services sectors. In the beauty category, recent investments from Stage 1 Fund have included Ellis Brooklyn, maker of customizable fragrances and moisturizers that are phthalate-free, paraben-free, cruelty-free, and eco-friendly; and Freck Beauty offering products including cactus-based cleansing gels, makeup palettes, eyeliners, and semi-permanent freckle cosmetics. 

Sugar Capital

Sugar Capital is a venture capital firm based in San Francisco. Founded in 2020, the firm invests in seed-stage, early-stage and later-stage companies spanning a wide range of industries from information technology to consumer products. It has invested in Starface, developer of hydrocolloid acne stickers designed to protect and heal blemishes, True Botanicals natural skincare products using ethically sourced vegan ingredients without any toxins or fillers and Exponent Beauty, maker of fresher beauty products and packaging that prevents the oxidation and degradation of unstable active ingredients.

Imaginary Ventures

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

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

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.

500 Global

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.

Khosla Ventures

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.

Funk Ventures

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

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.

Y Combinator

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.

645 Ventures

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.

Cowboy Ventures

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.

Lerer Hippeau

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.

BBG Ventures

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.

Beliade

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.

Sekhmet Ventures

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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Get to know 10 VC-backed clean beauty brands that are creating buzz
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*The data included in this article is accurate per PitchBook data as of January 10, 2022; data is subject to change frequently