9 months ago
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Based on the slew of M&A deals at the end of 2023, the current headlines of an impending Rare Beauty sale and the recent Galderma IPO, the beauty investment space appears to be strong.
In late March, VC firm XRC Ventures published the “Consumer VC Benchmarks: Seed-to-Series A” report detailing that strength and its implications, guiding smaller beauty brands hoping to raise funding and highlighting several investing trends. Since 2015, XRC Ventures has invested in over 140 early-stage beauty brands, including fashion device company Solawave, Billie personal care and Naked Sundays skin care.
Among the trends the company called out was a strategy shift for generalist investors like Andreessen Horowitz and Lerer Hippeau — specifically, moving away from investing in the consumer category to focus on other areas like artificial intelligence. Additionally, M&A is back and at a healthy clip, with sales multiples ranging from 3x to 7x of a brand’s annual revenue. Yet despite this, VC funding for beauty and personal care has significantly dipped, with a decline of 50% year-over-year for the first quarter of 2024, according to XRC research citing Crunchbase data.
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