News broke that Korean beauty company Memebox raised another $60MM from a variety of investors in a Series C round bringing their total funding to almost $157MM.
In my opinion, there were two very interesting things from this announcement.
Focus on the US Market
First, they plan on focusing on the US market. At about $100MM in annual sales only 20% of their employees and 15% of their sales come from the US. The re/code article above states that those ratios will shift as they invest in and focus on the growing US market. Memebox founder Dino Ha is quoted as saying, "We see the biggest opportunity in the world here, even more so than China."
What does this mean?
That statement that they believe the US market has the biggest opportunity in the world could mean big changes in China. There has been some news about the Chinese government regulating Korean beauty products more in an attempt to control (and maybe stabilize?) the market. This could have repercussions to the Korean beauty export market in general.
This also means that current Stateside K-Beauty players will just continue to be dwarfed by Memebox. e-tailers such as Peach & Lily, Glow Recipe, and Soko Glam will just continue to fight for territory within their own niche markets while Memebox becomes a kind of Amazon in the K-Beauty category.
Also, for new players that were thinking about entering the US market...well, it might not be worth it anymore unless you are highly differentiated and super well capitalized. It's hard to beat $157MM in funding.
Janet Gurwitch Joins as an Advisor
re/code didn't capture it which was a miss but I read on this PE Hub article that Janet Gurwitch has invested and joined their advisory board.
If you don't know who Janet Gurwitch is, she is the founder of Laura Mercier. She started her career in retail and left an executive position at Neiman Marcus to found Laura Mercier. After she sold Laura Mercier she has been investing and advising a lot of companies in the beauty and retail space. She has invested in Dollar Shave Club (sold to Unilever for $1B), Dry Bar, Urban Decay (sold to L'Oreal), etc. Basically, she is on a roll and she is a big deal.
The fact that she invested in Memebox and has joined as an advisor signals to me that Memebox is about to become a household name and also a really big deal.
This is a company to watch next year and not just if you're interested in K-Beauty. Every beauty company should be looking at what Memebox does in the US market. I'm not sure what their valuation is but I'm assuming it's around $500 - $700M based on sales multiples. They are getting very expensive to acquire but perhaps they have their eyes on an IPO.