Beauty supplies is one of several e-commerce areas that lacks a dominant player. To fill that void, several start-ups have attracted venture funding in hopes of building a prettified version of Amazon.com.
Earlier this month, Gloss.com raised $20 million in its second round of venture financing. The San Francisco-based company, whose Web site is not scheduled to launch until November, has now raised more than $24 million in venture capital.
MediaOne Group, the venture arm of broadband communication service provider MediaOne Group, led the Series B round. Additional first-time investors include funds affiliated with BancBoston Robertson Stephens, Intel Corp., JK & B Capital and Nexus Group LLC. First round investors Bessemer Venture Partners and Matrix Partners also returned (PEW July 5, p. 2).
“Our business model is geared toward broadband distribution, and we look at MediaOne as a valuable partner because of that strategy,” said Chief Executive Sarah Kugelman. “This will add to our first round, which helped us build an infrastructure.”
The bulk of the proceeds will target an aggressive marketing campaign that includes broadcast, print, online and event sponsorship.
The emergence of BeautyJungle.com Inc. of Chicago will further crowd the market. The company is raising $25 million through a private placement of Series B preferred stock, which it plans to close in October. Earlier this year, BeautyJungle.com raised $3 million from the CEA Investment Bank in Tampa. The Web site is slated to launch this fall.
“We will have a special focus on prestige-type brands but span across the entire beauty segment,” said CEO Ed Lahood. “We will have a considerable marketing budget to get the word out.”
Lahood said Beauty.Jungle.com is talking with Chicago venture firm divine interVentures about participating in the round, as well as providing technical support and a possible headquarters in its proposed technology incubation center in Chicago’s near-west side (PEW, August 9, p. 1). Divine interVentures CEO Andrew Filipowski sits on the BeautyJungle.com board of directors.
Joining Gloss.com and Beauty.com in the battle are Eve.com and Ingredients.com. Eve.com, which received $17.5 million last month in its third round of funding led by Weiss, Peck & Greer Venture Partners, is among the only operational venture-backed beauty sites. Scripps Ventures led the round. Ingredients.com differs from the pack by only selling items from its own product line.
The winner of this battle should have no problem masking the assorted bumps and bruises.
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