A new hair extensions startup in San Francisco’s East Bay called Mayvenn is changing the old brick-and-mortar distribution model for buying longer locks — by giving stylists their own online hair stores.
Most hair extensions are imported to the U.S. from Asia and the Indian subcontinent and then sold to small corner beauty stores where the sales clerk may or may not know much about hair extensions. The hair is then purchased by the customer and brought to the stylist.
The problem is the stylist not only has zero control over the quality, but no way of earning a commission on the purchased hair.
Mayvenn’s model sets each stylist up with marketing materials and a webstore to sell what is promised to be reliable hair quality at a lower cost and the opportunity to make a commission on every piece of hair purchased.
Prices range from the hundreds to thousands of dollars for extensions, but Mayvenn’s co-founder Diishan Imira can keep the cost down and quality up due to some fundamental relationships he has with vendors in Asia. Imira is not only fluent in Mandarin, but has worked on International trade in this area of the world for over a decade.
He sees the model working particularly well for hairdressers catering to the largest consumers of hair extensions – African-American women.
It’s just a much better system and Diishan is the guy who figured it out.
Mayvenn also offers 15 percent commissions and includes an individual website where stylists can direct clients to purchase the hair.
Mayvenn rapidly grew to 30,000 stylists in just a year and a half and is already pulling in eight figures in annual revenue. Those figures were impressive enough to grab the attention of a16z’s Ben Horowitz.
“It’s sort of like if you’ve ever run into anybody selling Amway or Avon or Herbalife or any of those things, most of them are like ‘well I put in a bunch of money I should never have done that. I lost all my money.’ But for the Mayvenn people, they put in no money and just get money out,” Horowitz told TechCrunch over the phone. “It’s just a much better system and Diishan is the guy who figured it out.”
Andreessen Horowitz led Mayvenn’s recent $10 million Series A funding round and Horowitz, who is one-half of the founding a16z partnership, plans to sit on the startup’s board as an “observer.”
500 Startups, Trinity Ventures, Core Innovation Capital, Cross Culture Ventures, Impact America, Apple’s Jimmy Iovine, tennis star Serena Williams, Translation CEO Steve Stoute and Anjula Acharia-Bath also tossed money into this round.
Mayvenn raised $3 million in a seed round prior to this raise, bringing the total in financing to $13 million for the startup. According to one source, the raise puts Mayvenn’s valuation at close to $62 million. However, Pitchbook analysts told us that valuation is closer to $39 million post raise and that Mayvenn originally sought $20 million but ended up taking $10 million. Had it raised the $20 million, the startup would be closer to that $62 million valuation.
It’s probably a sound investment. The model empowers stylists to make money on products they work with and hair extensions continue to be a popular choice for African American women – comedian Chris Rock’s 2009 documentary Good Hair is a testament to this $684 million black hairstyle industry.
Imira believes his startup has potential outside of the African American demographic as well. And Horowitz agrees. The a16z partner sees the potential in the Jewish community just as much as within the African American community.
“People in the firm thought this was a product for black people, but I was like no, no, no, you’ve got it all wrong. It’s not a black company. It’s a Jewish company. The name Mayvenn is the key, which, of course, is the Yiddish word for trusted expert,” Horowitz told me.
Both Imira and Horowitz have a point. There are plenty of women from all ethnicities in both Hollywood and suburbia now willing to pay into the thousands at their local salon to thicken and lengthen their tresses. I spoke to a couple of hairdressers who work with hair extensions in both the Bay Area and Utah who could affirm there were plenty of women from every ethnicity willing to fake longer locks.
“Hair extensions is newer outside of the black community but it’s growing incredibly fast,” Imira said. “It’s becoming ubiquitous.”
But Imira’s primary focus is on the stylists. “This is a business for beauticians so that they can run retail without having to buy or hold any inventory. It’s an inventory as a service business for beauticians,” he said.
Imira plans to use the new cash to scale the business so that he can “quickly jump from eight figures to 10 figures in revenue per year.”