Venture capital is pouring into fledgling cosmetics labels poised to ride the global K-beauty wave as big Korean beauty brands already command lofty valuations.
Fruitful, the company behind color cosmetics label Tiptoe, recently raised $1.45 million in pre-Series A funding. Schmidt, KD&J Partners and Amorepacific Corp., one of South Korea’s two largest cosmetics makers, participated in the funding round.
Tiptoe, known for its pastel-toned, girlish aesthetic, sells lip tints and jelly sticks through Olive Young, South Korea’s largest beauty retailer and its own online mall.
Fruitful plans to use the fresh capital to expand its retail footprint and expand into Japan.
Fruitful exemplifies a broader wave of investment sweeping across the K-beauty sector ranging from basic skincare to color cosmetics and haircare platforms.
In September, LAFIQ Cosmetics Co., a research and development company, secured 15 billion won ($10 million) in Series B financing led by Kolon Investment.
BPlant, a beauty startup founded by former TV anchor Kim So-young, also attracted 7 billion won in Series A funding from Altos Ventures, this year.
LiveX, which offers shared workplaces tailored for hair designers, landed 6 billion won in a Series B round led by Seoul-based BNK Venture Capital in June.
“With some established K-beauty brands traded at EV/EBITDA multiples near 20 times, competition to secure promising small- to mid-sized labels has been intensifying,” said a Korean beauty company executive.
According to the Ministry of Food and Drug Safety, South Korea’s cosmetics exports climbed 17.5% to $8.5 billion in the third quarter from a year earlier.
At the current pace, annual exports of South Korean cosmetics are on track to surpass $10 billion for the first time.
By Jae-Kwang Ahn
ahnjk@hankyung.com
Yeonhee Kim edited this article.
