Gone are the days of clean beauty being confined to the luxury category. The investment firms behind premium clean skin-care labels Tatcha and Youth to the People are now setting their sights on affordable price points in the clean category with investment in Innbeauty Project.
On Tuesday, former Tatcha investor Beechwood Capital and Strand Equity announced the closing of a minority investment in the 2-year-old clean skin-care brand. The undisclosed investment amount will be used to support the brand’s expansion following its recent launch at Sephora, where it is available online, in all 490 stores and at 200 Sephora x Kohl’s locations. While both investment firms have invested in premium and luxury beauty, Innbeauty Project signals their new interest in a more accessible price point for clean beauty, as the concept becomes increasingly mainstream.
“People say, ‘I want clean,’ but then they look at the price tag,” said George Song, vp at Strand Equity, which also invests in Youth to the People and Wander Beauty. “Innbeauty is doing something that is really unique in being able to offer these ingredient stories and this level of efficacy at a price that’s accessible for more people.”
“We like that positioning. It’s a little bit different than anything we’ve done in our portfolio,” said Larry Kahn, managing partner of Beechwood Capital, which invested in Tatcha prior to its successful exit to Unilever. The new brand will be the most affordable option in its beauty portfolio to date, joining Kosas, Shani Darden and Violet Grey.
Innbeauty Project was founded in late 2019 by Alisa Metzger, a former vp of marketing at Tula, and Jen Shane, who has worked in product development at a range of brands including Tula, Tatcha and Bareminerals, among others. They launched the brand exclusively via DTC, before establishing its first retail partner, clean beauty retailer Credo Beauty, in 2020.
The brand is geared toward the “younger next generation of consumers that want it all,” when it comes to clean ingredients, “but don’t want to pay $60-$70 per product,” said Alisa Metzger, co-founder of Innbeauty Project.
Designated Clean at Sephora, Innbeauty Project prices range from $15-$32 among its products stocked at Sephora. The brand was attractive as an investment because it is “unique at Sephora, in the sense of its price point,” said Kahn.
When looking at the price ranges of brands including Youth to the People and Tatcha, “there’s a big gap between those guys and the basic brands at Sephora: The Ordinary, The Inkey List, Sephora Collection,” said Song. There’s a big white space for brands with more accessible positioning, especially with “the growth of the Gen-Z audience,” he said.
“[We were] very cognizant of the fact that, in order to create the brand, we needed a really strong distribution retail partner to be our marquee retailer, especially in the U.S.,” Metzger said. As soon as the brand secured its Sephora partnership, it began reaching out to investors.
The clean category has seen an influx of brand launches at lower price points geared toward the Gen-Z demographic such as Kinship and Youthforia. They often feature bold, colorful branding, like Innbeauty’s neon color scheme.
“Skin care is always mysterious and clinical, and a lot of people are put off and confused by that,” said Metzger. “So we said, ‘Let’s go bright. Let’s go bold. Let’s go fun.'”
Innbeauty has also made a foray into skin-care-color cosmetics hybrids with its lip oil. “We believe in color and skin care,” said Kahn. “Our investment in color with Kosas is also about skin-care benefits within color.”
“We do like to play in that kind of hybrid skin-care-makeup category, but always with a skin-care viewpoint,” said co-founder Jen Shane.
Sephora has been a significant part of the growth strategy for several beauty brands in both Beechwood’s and Strand’s portfolios. Kosas recently upped its presence in Sephora with a wider bay in stores.
“We see a path to growth with Sephora. We think [the brand] fits the Sephora customer,” said Kahn.
“Sephora has really shown that they can be really good partners and take little indie brands and make them household names,” said Song.
According to the investors, the presence in Kohl’s underscores the growing mass appeal of clean beauty and demand for mid-range price points.
Clean beauty has been “democratized, as more people have recognized it,” said Kahn.
Song added, “You’re seeing more and more challenger brands that talk about clean ingredients. Consumers’ awareness is definitely starting to pick up.”