SECTOR DEALS OF THE WEEK

Private Equity Looks to Invest in Younger and Earlier Stage Beauty Companies


Sequoia Capital Acquires Minority Stake in Charlotte Tilbury


Sequoia Capital Partners made a minority growth capital investment in U.K.-based Charlotte Tilbury Beauty, a high-growth, hybrid beauty brand offering skin care, color cosmetics, and fragrance products. The brand was founded in 2013 by makeup artist Charlotte Tilbury with backing from angel investors and two U.K-based private investment firms, Venrex Investment Management and Samos Investments. The brand is currently available at more than 70 stores in the U.S., Canada, and Europe, including Nordstrom, Selfridges and Bergdorf Goodman. Charlotte Tilbury maintains two stand-alone stores in London and a growing online presence. The company did not disclose financials, but it experienced triple-digit growth in 2016 and reached more than 1.3 million followers on Instagram.


The investment will support the company’s plans for broader distribution, including a near-term push into the Middle East. Sequoia Capital previously made an early-stage investment in IT Cosmetics, which sold to L’Oréal for $1.2 billion last year, and has previously backed Airbnb, Alibaba, Apple, Dropbox, Google, Instagram, JD.com, WhatsApp, and YouTube.


The Charlotte Tilbury deal follows in the footsteps of a flurry of minority investments in early-stage beauty care companies. Recent early-stage beauty care investments include L Catterton’s investments in Kopari Beauty and TULA, Main Post Partners’ investment in Milk Makeup and VMG’s investment in Drunk Elephant. Each of these investments involved companies founded less than three years ago and each with a small revenue base relative to historical private equity beauty care investments. Private equity has shown an increasing willingness to invest earlier in the brand growth cycle as beauty care companies have been able to scale at increasingly rapid rates with the help of social media and as financial sponsors have become more value-added and knowledgeable on the sector.


We expect this early-stage investment trend to continue, further driven by intensifying competition for beauty care investments among financial sponsors and strategic acquirers, and an incredibly strong track record of successful and high-profile investments in beauty care brands to date.



Steve Davis
Head of Beauty & Personal Care



Shahriar Attaie
Vice President


 

About Intrepid's Beauty & Personal Care Practice

Intrepid provides dedicated merger and acquisition advisory and capital raising services to the Beauty & Personal Care sectors. As a result of their focus, our industry bankers have a deep understanding of value drivers in the sector. Our Beauty & Personal Care practice is uniquely dedicated to clients in the middle market, including entrepreneur-owned companies, financial sponsors, and micro- to mid-cap public companies.