Investors Funneled $ 2B to Beauty, Personal Care in 2020
Funding for beauty start-ups hit an all-time high last year, CB Insights says. And 2021 is shaping up to be even bigger.
During a year when hardly anyone wore makeup, apart from the occasional Zoom, one might think beauty start-ups would add to the list of the pandemic’s business casualties. But the numbers tell a different story.
According to a report sent to clients by CB Insights, investors were champing at the bit to back innovative beauty newcomers. In 2020, funding exceeded $2 billion — an all-time high in this space — and 2021 is already on track to go bigger. Investors have channeled more than $1.1 billion since January, far eclipsing the $238 million pulled in this time last year.
“Over the last year, consumers have turned to categories like skin care as a way to practice self-care,” the firm said in its report. “Makeup, which was already falling out of favor before COVID-19, took an even bigger hit as more people stayed at home and mask-wearing became the norm.”
Since 2015, Unilever Ventures, Circle Up and 500 Startups have been the top three investors in beauty and personal care. Unilever alone has backed more than a dozen beauty start-ups, including six last year, half of which — BYBI, PurePlay Skin Sciences and True Botanicals — are in skin care.
While investors are throwing their lot in with a variety of start-ups focused on different areas, the ones generating the most excitement across the major players are focused on clean beauty, skin health and others fashioned as direct-toconsumer businesses.