Madison Reed, Ritual, and FabFibFun have all announced major funding rounds - here's what the startups have in common
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- In the last week alone, three popular online retail startups in the lifestyle and wellness industry have announced major funding rounds.
- Hair care brand Madison Reed raised $51 million (Series D), lifestyle membership service FabFitFun raised $80 million (Series A), and women's vitamin company Ritual raised $25 million (Series B).
- The investments tell us that the futures of the beauty, wellness, and lifestyle industries are ripe for potential - and transparency, quality, and engagement are the keys to success
- These funds will help the companies build on their existing success with creating innovative, high-quality products and experiences.
The beginning of 2019 is already proving to be an eventful one for three popular online startups in the beauty, lifestyle, and wellness industries.At the end of January, hair color brand Madison Reed announced that it raised $51 million in a Series D round led by Norwest Venture Partners. Lifestyle membership and subscription service FabFitFun raised $80 million in Series A funding led by Kleiner Perkins. And today, women's vitamin subscription company Ritual closed a $25 million Series B round, also led by Norwest Venture Partners.
The recent votes of confidence are a nod to the innovations already introduced by these nimble, customer-centric startups. Founded in 2015 and the youngest of the group, Ritual is challenging the $50 billion vitamin market with its multivitamin and prenatal products that are delivered to women's doorsteps for $30 to $35 a month.
FabFitFun first launched in 2010 as a newsletter and blog, but now helps more than a million members discover the latest products in beauty, wellness, fashion, fitness, and more. Every season, they receive a collection of full-sized products, valued at more than $200, for $49.99.
With a total of $121.1 million raised, Madison Reed makes beautiful at-home hair color without harmful chemical ingredients. It also owns half a dozen brick-and-mortar Color Bars.
Delivering high-quality products is central to these startups' businesses. For Ritual and Madison Reed, that means using beneficial ingredients, being transparent about its ingredient lists, and inviting customers to become more educated about the products they put in and on their bodies.FabFitFun, while it doesn't make its own products, acts as a curator of top brands and guides members towards products they'll probably like. Much of the funding will go towards improving these products and experiences, including research and development.
Katerina Schneider, founder of Ritual, says the company will be focusing on "optimizing product touch points like taste and scent to facilitate daily vitamin intake and the formation of healthy habits" and investing in "nutrient-delivery technology, keeping the brand at the forefront of vitamin efficacy and bioavailability and making sure customers have access to a multivitamin their bodies can best utilize."
The customers who try the hair dyes from Madison Reed or the curated boxes from FabFitFun don't just buy once, then abandon ship. These large funding pushes point to the value of thoughtful, strategic engagement, with both customers and brands.
To continue interacting with customers between the four box deliveries of the year, FabFitFun has seasonal sales, a community platform, and a live TV channel featuring exclusive content, including workouts, cooking shows, and DIY products.
On the brand partnership side, cofounder Michael Broukhim believes "being featured in a FabFitFun box rivals running a Superbowl commercial as an unparalleled brand moment." Through the service, lifestyle brands can more directly reach customers, rack up more impressions through promotions and branded content creation, and receive custom research and feedback collected by FabFitFun.
Madison Reed brings its online hair care experience offline and is looking to grow to 40 locations nationwide by the end of 2020. It also now has an exclusive partnership with Ulta Beauty, both online and in stores.
It's these long-term relationships that are most coveted but also most difficult for retail brands to develop. Ritual, FabFitfun, and Madison Reed have all benefitted from the large amounts of customer data at their disposal and they serve as models for how to turn this information into engaging experiences that survive past the last online click.With support from investment firms who have previously invested in direct-to-consumer successes like Dollar Shave Club, Glossier, and Casper, these startups are in good hands and good standing. They tell us that the futures of the beauty, wellness, and lifestyle industries are ripe for potential - and transparency, quality, and engagement are the keys to success.
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