Cover Sunnies Face lipstick is a hit in the Philippines, where the brand was founded

A gigantic market with high profit margins and an apparent immunity to the impact of global crises—it’s no wonder beauty startups are becoming increasingly attractive to investors

When we think about billion-dollar ideas, we tend to picture social media mavericks and innovative new forms of tech. We don’t think about lipstick. However, thanks to a plethora of female-led businesses shaking up the US$675 billion beauty industry, skincare and make-up firms have become the new darlings of venture capitalism.

“Statistically, the startup world is really male-driven; that’s a fact,” says Pocket Sun, the co-founder of venture capital firm SoGal Ventures. “But slowly investors are starting to realise the very high price they’ve been paying for this bias. We work with female-led companies across all sectors, and there is a lot of money to be made in beauty. I’d suggest anyone deciding whether to invest in a beauty brand consider three things: whether they are offering a product people need and will continue to need, whether they connect with customers, and whether the product actually works."

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Ticking Off The Boxes

The women and companies that have rapidly become household names tick all three boxes. Pat McGrath Labs was awarded a billion-dollar-plus valuation by investors thanks to its unique formulations and clever brand marketing that targeted entirely new demographics. Drunk Elephant—which makes skincare products using only biocompatible ingredients—began as a small, home-run startup and was sold for US$845 million last year to Shiseido, which beat Estée Lauder in the very last round.

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And with a narrow product range that is focused mostly on skincare and some colour cosmetics, Glossier is arguably the leader in the field. All about celebrating customers’ natural beauty, its tagline is: “Beauty products inspired by real life”—and it has worked. Glossier’s US$100 million funding round last year gave the start-up a US$1.2 billion valuation.

“The success of Glossier is not just products,” says Sun. “They defined a new way for a beauty company to rise and represented a new narrative in beauty. This is not reserved for major beauty brands but is for smaller ones too—beauty startups shouldn’t see customers as consumers but as something more intimate than that. It’s important to provide a product that helps create a collective life experience that accumulates goodwill from a whole community.” 

Beauty Unicorns

While fashion has some unicorns to its name, they are proliferating a lot faster in the beauty world. There are a number of reasons, but the biggest is that the mark-up on beauty products is a lot higher than on clothes, meaning there is more easy money to be made. Beauty companies also have far fewer returns to deal with and don’t need to worry about sizing. Beauty influencers also tend to get more followers on Instagram than their fashion counterparts, and so can whip up excitement for a product in record time. Tastes vary less widely internationally in beauty than they do in fashion, and it is being far less affected by the coronavirus, as people splurge on skincare products from home. 

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“Sociolla came from a personal need,” she says. “I believe beauty shopping and the whole experience of finding the right beauty content, product or even inspiration should not be painful. Beauty should be accessible to anyone.”

The company, which Indiana founded with her two partners in Indonesia, sells a range of cult products from more than 140 brands, with 3,000 products available on its website. She has also launched an online magazine and weekly newsletter packed with easy, chatty beauty tips aimed at young women across Southeast Asia.

“Beauty is a unique category that needs special knowledge and skill to really understand it,” says Indiana. “The role of a real beauty enthusiast, a person with sensitivity to beauty, is crucial in creating and developing the right product for the right consumer.”

Asian venture capitalists have woken up to this golden opportunity. “I now fast-track female-founded businesses,” says Vinnie Lauria, the founding partner of Golden Gate Ventures in Singapore. “If they are conceived of or launched by women then they get straight to the interview stage, as I’m so keen to diversify what we’re offering, and female-led startups have been doing really well recently. This is a great time for investing in beauty companies across the board, for sure.” 

Female-led beauty unicorns are shaking their manes in Asia, where beauty needs are different from those in Europe and the US, and often untapped. Orcé was founded by Yu-Chen Shih, who was born in Taiwan but raised in Singapore. Her six-shade foundation range was started in response to the lack of colour options for Asian women who aren’t interested in whitening. Plus, she created a formula that addresses issues common to Asian skin, including sensitivity, excess oil production and dryness. Her products are now sold globally.


In China, small beauty startups have become mega-successful while remaining largely under the radar internationally. Judy Doll is sold in supermarkets around the country and has tapped into the idea of using the same supply chains as major international beauty brands, but to create cheap colour-pop products beloved by teenage girls.

Another is Perfect Diary, which has risen to become China’s number one beauty brand in just three years, and was the first cosmetics brand on Tmall, a popular online retail platform, to earn more than 100 million yuan in its first hour and a half. Its success is largely down to its very high profile on WeChat and its pioneering ways of engaging with customers.

“In my own portfolio we have a beauty product I’m really proud of that has been built from the startup stage,” says Sun. “It’s called Winky Lux, a luxury, cruelty-free beauty brand aimed at Gen Z: it’s affordable and it’s doing really well, fitting into the self-care category, but also super fun. They have really cracked the code and proved having stand-alone stores is not essential.”

Going South

An increasingly important region that often gets forgotten is Southeast Asia, a market business maven Chrisanti Indiana tapped into early on. Her startup Social Bella is beloved around the region for its beauty e-commerce platform Sociolla, and secured US$40 million in funding at the end of 2019, prompting Singapore fund Temasek to call it an “aspiring unicorn”.

Indiana first got the idea for Sociolla when she realised she wasn’t able to buy all the products she needed in Jakarta, since everything on offer was either focused on the Western, Chinese or Japanese markets. She decided to curate a list around what Southeast Asian women wanted, bringing together make-up and skincare from around the world that met the needs of women from the region—thinking in terms of climate, cultural norms, skin tone and texture, and fashion.

Group Effort

This formula is working equally well in the Philippines, where Martine Ho, Georgina Wilson, Jess Wilson, Bea Soriano-Dee and Eric Dee have launched a brand, Sunnies Face, that is seeing seriously impressive levels of success with its hero product.

The lipstick, which is called Fluffmate, comes in 15 colours and has rapidly become a cult buy in the country. The appeal comes from the fact the shades are universally flattering and designed to suit every skin tone and complexion. And with women like Georgina Wilson in the boardroom—who has 3.2 million followers on Instagram—it is no surprise the brand has nearly 400,000 followers on Instagram and has celebrities like Christina Aguilera being papped wearing its most popular shade, Nudist.

“Turning your beauty startup into a unicorn isn’t really about whether you’re on TikTok or WeChat,” says Sun. “A brand must have a real life and personality of its own—that’s what will get the message out there. Good products will travel far; it’s not so much about marketing as making sure you really care about the people you’re serving, and responding to an unmet need.

“I think the beauty brands that serve the subset of a demographic and serve them well will do really well in the years to come. There is no need to appeal to everyone; just do what you’re doing better than anyone else and success will follow.”


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