By Rachel Brown. Source: Business of Fashion.
NEW YORK, United States — Unilever Ventures, the venture-capital and private-equity arm of consumer packaged goods conglomerate Unilever PLC, has secured a minority stake in prestige natural skincare brand True Botanicals as part of a more than $3 million round of seed funding that includes several investors.
The deal is Unilever Ventures’ first with a direct-to-consumer luxury skincare brand, and demonstrates the appeal of natural products and digital business models that propelled the likes of Warby Parker, Everlane and Dollar Shave Club, now owned by Unilever, to beauty industry investors.
Unilever Ventures has poured an estimated €450 million into some 40 startups since its establishment in 2002. It concentrates on digital and beauty companies in the US, Europe and Asia with investments ranging from 5 percent to controlling shares.
“True Botanicals ticked a lot of boxes for us: an early, but demonstrable high growth trajectory, a great founding management team, an authentic brand with a distinctive positioning as well as an innovative, digitally native business model,” said Olivier Garel, the London-based head of ventures at Unilever Ventures, continuing, “From a business perspective, the direct distribution enables the company to invest much more than has been traditional in the product quality and the shopping experience.”
Mats Lederhausen, managing partner of investment firm Be-Cause, former managing director of McDonald’s Ventures and former chairman of Chipotle Mexican Grill Inc., participated along with lead investor Unilever Ventures in True Botanicals’ seed round. He envisions the brand, which developed an online quiz to tailor product suggestions for individual skin concerns and characteristics, putting the money toward enhancing its technology. “Through the use of personalised diagnostics coupled with smart video and information, we can deliver a much more personal touch to helping people navigate the usage of products,” he said. “Think of it as a digital assistant.”
The direct distribution enables the company to invest much more… in the product quality and shopping experience.
Hillary Peterson started True Botanicals in 2014 after six years as CEO at skincare brand Marie Veronique. Previously a marketing executive at Levi Strauss & Co., Peterson switched career paths from apparel and retail to natural skincare after a thyroid cancer diagnosis caused her to scrutinize the products she’d been using on her body and face. A year ago, Christina Mace-Turner joined True Botanicals as partner and CEO to evaluate funding opportunities, revamp the brand’s website and build digital infrastructure to fuel sales. True Botanicals is headquartered in Mill Valley, California.
“We have a very mission-driven business and culture. We are focused on eradicating the practice of selling toxic products,” said Mace-Turner, noting that True Botanicals holds a Made Safe certification validating its ingredients’ non-toxic status. “Our goal is not just to be a little company that grows big and makes a lot of money. We are trying to change an industry and, if you want to change an industry, you have to work with the people who control it. Our experience with Unilever is that they are very supportive. They recognised we are different from a lot of brands they are invested in, and that’s why they were interested in us.”
True Botanicals is available at Barneys New York and natural beauty retailer Follain, but Mace-Turner doesn’t anticipate brick-and-mortar sales ever exceeding 20 percent of its turnover. The brand’s assortment features nearly 50 products priced from $34 to $375, and includes collections for normal and acne-prone skin, as well as rosacea. True Botanicals expanded into haircare in 2016, and shampoo and conditioner quickly became bestsellers. Additional bestsellers are Cellular Repair Serum, Vitamin C Booster and Pure Radiance Oil.
Neither Mace-Turner nor Garel would disclose True Botanicals’ annual sales, but Garel said the brand and LXMI, another California skincare brand Unilever Ventures recently invested in, are on the small side to receive backing from Unilever’s venture-capital offshoot. “True Botanicals and LXMI are stretching our model,” explained Garel. “We work in seed-stage investment very selectively. We need to fall in love with the brand and the founders. It wasn’t that difficult with True Botanicals and LXMI.”