Julep, a cosmetics and beauty brand and e-commerce platform, has raised $30 million in Series C financing; Azure Capital, Madrona Venture Group, Altimeter Capital, Andreessen Horowitz and Maveron all participated in the round. The new investment brings Julep’s total venture funding to $56 million. Celebrity backers include Will Smith and Jay-Z.
Founded by former Starbucks executive Jane Park, Julep produces its own nail polishes, mascaras, moisturizers, lip glosses, face creams and other cosmetics that are sold on its site. The brand also has a monthly beauty and subscription service, through which it distributes its own products. What makes the startup unique is its social approach to product development.
The company crowdsources customer feedback on forums, Twitter, Facebook, Instagram and other social platforms and will manufacture and sell based on this feedback. The company also operates a number of salons and stores in the Seattle area where they receive customer feedback on items in-person. The company’s products are also sold at traditional retailers like Sephora and Nordstrom.
This approach is vastly different from traditional beauty brands and names we all know. It allows Julep to create a variety of different products in various colors 10 times faster than these brands. Another factor in Julep’s favor is that it isn’t constrained by shelf space, which is the case for most in-store beauty brands. The compressed cycle allows Julep to remain nimble and figure out what works and sells and what doesn’t.
To date, Julep has launched over 300 Julep branded, toxin-free nail, color cosmetics and skin-care products each year. The online channel has been successful for Julep; revenues from e-commerce sales tripled in 2013. Park has told us that because Julep produces its own products, margins are low.
There are certainly challenges in taking on brands like Lancôme, Estée Lauder and others. But the cosmetics and beauty industry is a $160 billion market. And as more spending moves online, Julep is in prime position to be the go-to place to buy makeup and beauty supplies.