The beauty industry experienced remarkable growth in recent years, peaking in 2021 with an unprecedented 358 deals and $3.12 billion in venture capital raised. However, investment in beauty declined in 2022, with the number of VC deals dropping to 283 and total funding amounting to $1.41 billion. Nevertheless, the allure of the beauty sector remains strong for venture capital firms and investors, fueled by the industry’s overall expansion and its utilization of technology and social media to drive sales.
The beauty industry landscape
The beauty industry has evolved from a concentration of traditional brick-and-mortar retailers, controlled by a handful of cosmetics manufacturers, to smaller ecommerce businesses dominating the landscape with all-natural and customizable products sold directly to consumers.
Consumer demand has paved the way for an increase in sustainable, cruelty-free, natural, and organic beauty-centered product lines. Startups responding to the growing prevalence of health and sustainability as a lifestyle and personal value include Gwen Stefani’s GXVE, Green Forest Wellness and Brown Girl Jane. Companies like Prose and Ellis Brooklyn are meeting the demand for more personalized fragrances, skin care, and makeup products tailored to meet individual consumer needs and preferences. Subscription-based beauty boxes like Ipsy, Birchbox and Fab Bag continue to flourish, too.
Top US VC firms investing in beauty and skincare
500 Global
Founded in 2010, 500 Global—formerly called 500 Startups—is an accelerator and VC firm headquartered in San Francisco. The firm seeks to make minority seed, early-stage, and later-stage investments in startups across a range of industries. 500 Global has invested in beauty companies dozens of times, including Cairo’s Source Beauty, an ecommerce platform offering beauty products from Egyptian and international brands. The firm has also invested in in Bespoke Post, a subscription-based collection of men’s lifestyle products, and Raw Apothecary.
645 Ventures
Founded in 2013, 645 Ventures is a venture capital firm based in New York. The firm invests in early-stage startups and seeks to invest in software as a service (SaaS), consumer, infrastructure, and security sectors. 645 Ventures invested in Beauty Bakerie, a Black-owned cosmetics company featuring a line of cruelty-free, vegan and long-lasting makeup products wrapped in packaging inspired by baking and desserts. They’ve also invested in Bespoke Post.
BBG Ventures
Founded in 2014, BBG Ventures is an early-stage venture capital firm based in New York. The firm makes investments in consumer-focused startups with a female founder and prefers to invest in internet and consumer tech, media, and consumer products sectors. BBG Ventures has invested in RadSwan, a company that offers hair extensions, wigs, and accessories for Black women with natural hair. The firm has also invested in Mented Cosmetics.
Beliade
Founded in 2015, Beliade (formerly known as M3 Ventures) is an early-stage investment firm based in New York. The firm prefers seed-stage investments and seeks to build relationships with disruptive consumer startups in the US. Beliade participated in the seed round for Isla Beauty, a performance beauty brand that is aiming to blur the lines between skincare and makeup. The firm has also made investments into Ceremonia, Heyday, and Kosas.
Brand Foundry Ventures
Founded in 2014, Brand Foundry Ventures is a venture capital firm based in New York. The firm calls itself “a consumer-only venture fund” and prefers to invest in early-stage companies and help them grow into household names. It works to amplify brands through building relationships with micro-influencers. Brand Foundry Ventures has invested in skincare company Starface, which developed a line of hydrocolloid acne stickers intended to help, protect, and heal blemishes.
Cowboy Ventures
Headquartered in Palo Alto, California, Cowboy Ventures is a venture capital firm that invests in early-stage enterprise and consumer-oriented startups. Founded in 2012, the firm recently invested in Matter of Fact, a seed-stage skincare company based in Los Angeles. The firm has also made investments in Brandless, Novi and MBX.
Female Founders Fund
Founded in 2013, Female Founders Fund is a venture capital firm based in New York. The firm specializes in startups and early-stage investments and invests in women-led startups operating in ecommerce, IoT, marketplaces, and platforms. The firm has invested in Billie, a lifestyle brand intended to provide consumers with quality shaving supplies and premium body care products.
Forerunner Ventures
Forerunner Ventures is an early-stage venture capital firm that invests in the ecommerce, software, and retail sectors. It was founded in 2010 and is based in San Francisco. Forerunner Ventures has invested in Curology, an online dermatology service that offers customized skincare treatment plans and products. The firm has also invested in Glossier, Prose, Birchbox, and Dollar Shave Club.
Funk Ventures
Founded in 2000, Funk Ventures is an early-stage impact investing and acceleration firm headquartered in Los Angeles. The firm seeks to invest in the healthcare, wellness, medical technologies, and cleantech sectors based in Southern California. The firm has invested in Every Man Jack, a manufacturer of skincare products designed to offer simple, affordable, and high quality grooming products for men.
Gaingels
Headquartered in Burlington, Vermont, Gaingels is a VC firm that invests in seed-to-growth/pre-IPO companies across the technology, B2B, healthcare, and consumer sectors. Founded in 2014, the firm recently invested in Glitzi, a health and wellness platform that provides beauty and spa services delivered to your doorstep.
Goodwater Capital
Goodwater Capital is a venture capital firm based in Burlingame, California. The firm was founded in 2014 and seeks to invest in early-stage consumer and technology companies. It has invested in Scentbird, a fragrance subscription service designed to revolutionize the way people shop for perfume and cologne.
Harlem Capital Partners
Founded in 2015, Harlem Capital Partners is a venture firm based in New York. The firm prefers to invest in early-stage companies and reserve capital for investments in minority and women founders in the United States. The firm has invested twice in Lumin Skin, a skincare line for men including anti-wrinkle, dark circle, and age management solutions.
Imaginary Ventures
Founded in 2017, Imaginary Ventures is a New York-based venture capital firm that invests in retail and technology across the US and Europe. In June 2023, the firm invested in the seed round of Half Magic, a makeup and accessories brand that offers vegan and cruelty-free cosmetics—including eye paint, lip liners and creams, hair pins, eyebrow brushes, and more. Imaginary Ventures has also invested in Westman Atelier, a startup offering paraben- and sulfate-free, skin-nourishing makeup, and 10Beauty, the manufacturer of home manicure machines.
Innovation Global Capital
Innovation Global Capital is a San Francisco-based venture capital firm that seeks to invest in fashion, beauty, food, and consumer technology. Founded in 2013, the firm has invested in Alchemy 43, an operator of cosmetic injectable clinics intended to bridge the gap between the medical aesthetic and beauty industries. Innovation Global Capital has also invested in organic cosmetic brand Kjaer Weis.
Joyance Partners
Founded in 2012, San Francisco’s Joyance Partners invests in early-stage companies across tech, healthtech, and mobile. In recent years, the firm has invested in Compass Beauty, a precision skincare company. Joyance Partners has also made VC investments in Phyla, Luna Daily, Scent Lab, and other brands.
Khosla Ventures
Menlo Park’s Khosla Ventures is a venture capital firm that makes investments in early- and late-stage companies. Founded in 2004, the firm has invested in NakedPoppy, an online platform that rigorously screens beauty products and maintains a list of known or suspected toxins that are harmful to skin. They also vet and test products to provide curated clean beauty brands.
Lerer Hippeau
Founded in 2010, Lerer Hippeau is a venture capital firm based in New York. The firm seeks to invest in companies operating in the consumer, digital media, ecommerce, emerging tech, and enterprise software sectors. Lerer Hippeau has invested in Prose, a haircare product line that customizes each formula to the customer based on their scalp needs, goals, lifestyle habits, and environmental exposure. The firm has also invested in Heyday, Glossier, and Birchbox.
Redo Ventures
New York’s Redo Ventures was founded in 2017 with the goal of investing in consumer software tech, commerce, media, mobile, advertising, enterprise software tech, and more. The firm has invested in companies such as Alchemy 43 and LOLI Beauty, an organic personal care and beauty brand.
Sekhmet Ventures
Founded in 2019, Sekhmet Ventures is a venture capital firm based in Portola Valley, California. It focuses primarily on investing in companies with science-based products in the beauty and wellness markets. The firm has invested in Codex Beauty Labs, a biotech company that blends the sciences of ethnobotany and plant biology to create beauty products that support the microbiome and provide meaningful skincare. Sekhmet Ventures has also invested into Young King Hair Care.
Short List Capital
Based in San Francisco, Short List Capital is a VC firm that invests in clean beauty, inclusive fashion, functional food, mental health and sustainability, tech, SaaS, and blockchain. The firm has invested in well-known beauty and wellness brands including Goop, Kosas, K18 Biomimetic Hairscience, Beautycounter, and others.
Stage 1 Fund
Stage 1 Fund is a venture capital investment firm founded in 2019 and based in Anaheim, California. The firm’s investments are primarily in ecommerce, business, and consumer products and services sectors. In the beauty category, recent investments from Stage 1 Fund have included Ellis Brooklyn, maker of customizable fragrances and moisturizers that are phthalate-free, paraben-free, cruelty-free, and eco-friendly; and Freck Beauty, which offers products including cactus-based cleansing gels, makeup palettes, eyeliners, and semi-permanent freckle cosmetics.
Sugar Capital
Sugar Capital is a venture capital firm based in San Francisco. Founded in 2020, the firm invests in seed-stage, early-stage, and later-stage companies spanning a wide range of industries from information technology to consumer products. It has invested in Starface, developer of hydrocolloid acne stickers designed to protect and heal blemishes, True Botanicals natural skincare products using ethically sourced vegan ingredients without any toxins or fillers, and Exponent Beauty, maker of fresher beauty products and packaging that prevents the oxidation and degradation of unstable active ingredients.
True Beauty Ventures
Founded in 2020, True Beauty Ventures is an emerging growth investment firm with offices in Miami and New York. The firm focuses exclusively on the beauty, wellness, and personal care industry. True Beauty Ventures has invested in Crown Affair, maker of healthy hair products with compostable packaging; Cay Skin, which makes silicone-free, vegan, cruelty-free, reef-friendly, and dermatologist-tested skin care products; and Kinship, which offers clean and cruelty-free skincare products.
Y Combinator
Headquartered in Mountain View, California, Y Combinator is an accelerator that funds early-stage startups. Founded in 2005 and actively seeking new investments, the firm invested in Function of Beauty—a New York-based beauty brand that offers customized haircare, skincare and bodycare products—in October 2021. Y Combinator has also made investments in Coral, Proven and Scentbird.
