Big Beauty vs. Indie Brands

In our recent coverage, we've looked at the increasingly consolidated tech and food industries, currently under antitrust scrutiny from Congress. But let's not discount Big Beauty, namely ​​L’Oréal, Shiseido, and Estée Lauder, as three major conglomerates in the industry, each responsible yearly for multiple acquisitions of smaller beauty brands. Today we’re looking at the success of several start-up brands achieving impressive exits and others rising to dizzying heights independently.

​​L’Oréal, Shiseido, and Estée Lauder

With deep pockets and valuable distribution channels in place, the Big Beauty companies are worth hundreds of billions of dollars each and are tough to compete against. They can turn any cool beauty brand into a mass-market darling with a few flicks of ink on a dotted line. But these big beauty brands are heritage brands–established, sustaining–rather than today's nimble, trending, and fast-growing digitally-native brands. ​Paris-based L’Oréal has taken the approach of using its resources to find and grow potential in beauty tech through its accelerator program at Station F in Paris. The company's interest in beauty tech led to the 2018 acquisition of Modiface, an AR-enabled makeover technology company, which has recently partnered with Facebook to bring virtual try-ons to Instagram’s shopping experience. Find out more about their acquisitions on our PrivCo deals pages (​​L’Oréal, Shiseido, and Estée Lauder)

High-Growth Beauty Brands

• Credo Beauty is an online retailer of clean cosmetics & skincare. The company exceeded $500BN in valuation last year.  

• IPSY is a subscription beauty box that has seen hockey-stick revenue growth since 2019. The San Mateo company has taken a cue from larger brands and made 4 acquisitions of smaller companies in recent years, including BoxyCharm & Beauty Noted.

• True Botanicals was one of the first direct-to-consumer beauty brands to take off using celebrity endorsements (Olivia Wilde) and a standalone “cult-favorite” marketing tactic. 

• Fenty Beauty also benefits from a celebrity, as its founder is none other than Rihanna. The company's popularity has been in large part due to its wide-range of shades & tones.

• Glossier was born out of a beauty blog by its founder, Emily Weiss, called Into the Gloss. The blog featured interviews with interesting, successful women who shared their “shelfies” (ie, pics of their fave products). That feature translated into Glossier’s prowess in influencer marketing, contributing to the company’s valuation of nearly $2BN.