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Beauty’s Most Powerful Financiers

While other categories have slowed over the past few years, beauty has remained a juggernaut, with Circana noting the segment is the fastest-growing among those it tracks.

This has in turn led to a huge spike in M&A activity, from venture capitalists betting on the next big thing to strategics strengthening their portfolios — to everything in between.

Just take venture capital. According to Pitchbook, the amount of VC money in beauty surged from barely anything at the turn of the century (there were literally two beauty VC deals in 2003) to billions of dollars annually.

But just who are the finance power players behind the deals, big and small?

WWD Beauty Inc has created a definitive index of the ecosystem with this, our inaugural Financial Power Player list. On it, you’ll find today’s most influential dealmakers divided into five key categories: investment bankers, strategics, private equity, venture capital, and family office and angel investors.

As for the beauty landscape they are operating in, 2024 is proving to be interesting for M&A.

After skin care reigned for many years, several makeup brands — Glossier, Kosas Cosmetics, Merit and Jane Iredale — came to market this year. Rare Beauty has also reportedly hired bankers, although sources insist that an official process has yet to be launched.

So far, none of these have transacted.

Skin care, meanwhile, is still showing signs of life with Bridgepoint kicking 2024 off by acquiring RoC Skincare. Also in January, Puig acquired a majority stake in Dr. Barbara Sturm.

Summer Fridays, the brand founded by influencers Marianna Hewitt and Lauren Ireland in 2018, which first came to prominence for its Jet Lag Mask and later its lip assortment, has received strategic growth investment from private equity firm TSG Consumer Partners.

Most recently, Byoma ventured into market, while Osea did, too.

Concurrently, wellness is coming more into the scope than ever before as the new frontier for beauty investors.

After Unilever snapped up Nutrafol at a supposed $1 billion valuation in 2022 and Compass Diversified acquired The Honey Pot Co. in a deal with an enterprise value of $380 million, investors are looking for more opportunities in the category.

Longevity is one of them. L’Oréal, through its venture capital fund BOLD, took a minority stake in Timeline, a Swiss biotech company developing solutions for longevity in the food, beauty and health sectors, and also took a 10% stake in Galderma earlier this year.

The finance power players who are forging such deals are shaping the future of beauty. Here is a look at them.

Dana Schmaltz, Tad Yanagi

Yellow Wood Partners

Big Deal: Yellow Wood has been snapping up many big beauty assets — and they’re not finished yet. The firm has stated publicly it’s not yet done with its shopping spree, with Schmaltz and Yanagi leading the charge.

Current Investments: PPI Beauty (Byoma, Real Techniques, Tan Luxe, Isle of Paradise, Tanologist), Elida Beauty (Q-tips, Pond’s, Caress, St. Ive’s, Tigi Bedhead), Suave Brands Company (Suave, ChapStick). 

 

View the full article at WWD.com