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Makeup Discovery Service BirchBox Raises $1.4 Million Seed Round

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Have you ever walked into your neighborhood Sephora only to feel utterly inundated by a sea of colorful beauty products? There are literally thousands of slots filled with bronzers, eye palettes, brushes, moisturizers, foundations, creams, creating a dizzying kaleidoscope of shades and scents.

As someone who doesn’t pour over fashion magazines for the latest product and make-up tips, it’s simply overwhelming.

I’ve always wondered why we couldn’t take the makeup discovery process out of the box, aka the brick and mortar experience, and bring it into the home in a real, non-Mary Kay tactile way that’s a step beyond mere online shopping.

A new breed of startups are trying to do just that, including New York-based BirchBox, which just raised a $1.4 million seed round led by First Round Capital and Accel Partners. Several individual investors participated in this round, including Sam Lessin (drop.io), Dave Morin (Path), Michael Dearing (Harrison Metal), Kirsten Green (Forerunner Ventures), and Gary Vaynerchuk.

BirchBox, which officially launched in September after a few months in beta mode,  is a mash-up of a monthly sample service, an online shop and a beauty editorial content.

The core of the site is the monthly subscription plan. Users can either pay $110 upfront for a full-year package or $10 a month, with the option to quit at any time.

Each month, users receives at least four premium samples (no dinky packets), shipped to their homes from high end beauty retailers like Laura Mercier, Nars and Cargo. The website supplements these monthly packages by providing pertinent tips and tutorials for the featured samples. If a user wants to purchase the full-size version, they can buy it on BirchBox, which will earn them points for future discounts (inviting new members will also help you rack up points). The idea is create a fun discovery process at an affordable price and to help brands reach consumers and drive sales.

The site currently has 2,000 paying subscribers and competes with traditional retailers, like Sephora, and other makeup sample subscription services like Yellow Box Beauty or TestTube.

“Beauty brands have long recognized the power of sampling and Birchbox improves the reach and effectiveness of sampling programs by identifying high potential consumers outside of the brands’ traditional reach, tracking their behavior and feedback, and encouraging a deeper relationship with the brand,” Principal of First Round Capital, Phineas Barnes said in a statement.

According to the co-founders Hayley Barna and Katia Beauchamp (who, like the founders of Gilt, are Harvard Business School grads) they wanted to create a service that was simple and exciting, by focusing on prestige brands and their latest products.

“We thought, wouldn’t every woman want a best friend who has access to the beauty editor’s closet,” Beauchamp says.

When I asked her whether she will eventually slap on an (oh-so-trendy) flash sales feature on BirchBox, she flatly said, “No.” Although she acknowledges the popularity of flash sales, and many like Gilt have dabbled in cosmetic offerings, Beauchamp says BirchBox is focusing on new products and catching them early in their life cycle.

For now, the service seems to lack significant customization (most users will get the exact same items), but the startup says it’s working on increasing personalization, particularly for skin types, hair traits and style tastes.

I’m interested to see how this service works out and whether the economics make sense for the participating brands. Beauchamp provided little detail on the pricing structure, but these top tier beauty brands are effectively giving away premium-sized samples of new products for the sake of promotion. That makes sense if users opt to buy the full-size versions when their samples run out, less sense if there’s a thin correlation between samples and sales.

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