Birchbox has secured a growth equity investment from Viking Global Investors, a longtime backer of the business.Viking has purchased a majority interest in the company, WWD has confirmed.”The next phase for Birchbox is about amplifying the impact we can have on our customer and accelerating our growth as a company,” said chief executive officer Katia Beauchamp in a statement. “As an independent company with renewed investment, we are in a position to actively pursue plans that help further our mission and fuel our ambitious goals in the U.S. and in our global market. As part of that strategy, we are prioritizing product innovation, the evolution of our digital experience and scaled partnership opportunities.”In addition to selling MAC and many other brands such as Atelier Cologne, Charlotte Tilbury, Dr. Jart, Jane Iredale and Kiehl’s, Birchbox has two brands of its own: Arrow and Love of Color. Arrow was one of the original ath-leisure-inspired beauty brands, and makes products like Color Enhancing Lip Balm, Aluminum-Free Deodorant and Water Resistant Mascara. Love of Color is a makeup brand with items like Liquid Shimmer Shadow and One & Done Shadow stick.The business has been rumored for months to be a target, and sources indicated it hired Centerview to look into a deal. At one point, reports circulated that Walmart was a contender. At that time, Birchbox was said to have about $200 million in revenue.For Birchbox, the deal comes after a shift in the venture capital markets caused the business to prioritize profitability over growth. (A series of layoffs ensued.)When Birchbox launched in 2010, it was first to market with the beauty box concept and quickly raised VC capital — in 2014, it was valued at $485 million. Similar beauty subscription concepts, like Ipsy, followed.When the VC markets tightened up, Birchbox hit pause on its growth plans, which originally included more stores. In 2016, the business raised an additional $15 million in bridge financing from existing investors on a quest to become profitable. In addition to Viking, Birchbox backers include Accel, Aspect Ventures, Bullish, First Round, Forerunner Ventures, Glynn Capital Management, Grace Beauty Capital, Grape Arbor VC, Harrison Metal and Lerer Hippeau Ventures, as well as individual investors.“Fundamentally, operational changes and making sure that we renegotiated contracts on fulfillment and getting boxes created so that we can realize the benefit of being a large business,” Beauchamp told WWD in 2017, when the business hit profitability. Leading up to that milestone, Birchbox expanded its retail presence with two brick-and-mortar stores in Paris and landed big-name beauty brands, including MAC Cosmetics.Today, Birchbox has 2.5 million active customers and partnerships with more than 800 prestige beauty industry brands. According to the company, 2017 was a record year for subscriber acquisition — it also marked a bigger move into television advertising that targeted different consumers than the “beauty enthusiast” targeted by many retailers.
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