Friday, March 09, 2007

The Venture Capital of Beauty

Beauty is one of the industries kindest to startups. After all, retail channels (Sephora, Ulta) depend on a continuous supply of new, independent brands to stimulate consumer demand.There's a whole ecosystem of suppliers, product forumlators, packagers that support and nourish startups. It's probably the most supportive, collaborative group of people I've ever worked with. Beauty companies can generate staggering amounts of cash with a handful of people. It is the Web 2.0 of consumer products.

Canada is exceptionally good at the game of beauty startups, as yesterday's report that Fusion Brands has sold a controlling interest for $45 million indicates. Fusion Brands is run by a handful of people under the control of Ottawa entrepreneur Randi Schinder. The company is a conglomeration of products Randi has developed over the years, including Clean Perfume and Jessica Simpson's Desserts products (an unfortunate set of 'edible" beauty products that, very fortunately, made a ton of money). With just a handful of people, Fusion Brands in Ottawa generated $100 million in revenue, Ms Shinder told the Ottawa Citizen. That's a lot of moisturizing body whip.

I work with a number of beauty startups, including my own. I love this group of clients: they smell good and bring samples(other clients, take note: no need to drop off wavelength multiplexers for me to try. Still working on my last one.). Toronto is fast becoming a significant centre of independent beauty brands - watch this space for further developments.

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