Venrex, the venture investment firm, and trade body the British Beauty Council jointly announced on Tuesday the establishment of a new fund for beauty companies headquartered in the UK.
The fund is open to companies that make products for consumers as well as those that make solutions for businesses, such as packaging, software and supply chain firms.
Venrex has previously invested in beauty firms such as cosmetics makers Charlotte Tilbury and Vieve and skincare brand Disciple. The British Beauty Council will act as a conduit, referring companies onto Venrex for consideration.
With a focus on early-stage firms, the average check size will range from $130,000 to $1.3 million. Mark Esiri, the company’s co-founder, said more funding could subsequently be available as Venrex plans to invest between $6 and 26 million in early stage beauty companies over the next few years.
“We want brands that enable a vibrant business ecosystem…ones that are sustainable and equitable,” said Millie Kendall, chief executive of the British Beauty Council, adding that B2B-oriented beauty companies are a key focus.
Kendall said her own industry experience, which includes co-founding multiple beauty companies including cosmetics line Ruby & Millie and e-tailer Beautymart had made her keenly aware of the need for industry-specific B2B providers, citing developing sustainable packaging and supply chain management as two areas that can stymie growth.
“I think a lot of investment funds are just looking for the [breakout brand], and there’s nothing wrong with that,” she said. “But I’d like to back extraordinary and diverse founders, and businesses, not just brands.”
Many investors have been de-prioritising consumer categories after increased competition and a slowdown business models reliant on digital advertising has made it harder to grow and scale. Esiri is confident that the right businesses will succeed. In an email to The Business of Beauty, he described the market as “huge and resilient” and being driven by a consumer base who are willing to pay for quality and innovation.
“If someone is determined to create a breakthrough company, they rarely stop to consider single digit changes in the macro-economic environment,” he said.
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