When Ipsy launched in 2011, the corporate focused on shipping full-sized beauty products out to big-time beauty enthusiasts.
It was during an era when YouTube-based makeup tutorials were on the rise, including those by Michelle Phan, Ipsy’s founder. The corporate’s launch followed Birchbox, but Ipsy’s mission — “to encourage everyone to specific their unique beauty” was different.
“Our innovation got here in two fronts. One is sort of this angle that influencers really matter and are democratizing beauty…The opposite one that individuals don’t really speak about that much is, we were the primary to have a beauty quiz,” said Marcelo Camberos, chief executive officer of Ipsy parent company Beauty For All Industries.
“You can not subscribe to Ipsy in any way, shape or form, without taking a beauty quiz,” Camberos said.
That information, combined with the corporate’s current 200 million product reviews, have allowed BFA to scale up a personalised subscription beauty company when others have failed.
“We use all those beauty reviews and all that quiz information to personalize not only what you get in your bag, but your whole experience. Then we now have to ship it to you inside five business days,” Camberos said.
There are “10s of hundreds” of Ipsy Glam Bag mixtures, Camberos said. “We’re putting all of them together within the warehouse and shipping them to you. That whole infrastructure, that’s where others who tried this, for instance Sephora … considered one of the explanations they struggled is to personalize at scale and to operationalize all of that, that is just not easy, that’s where we’ve been investing loads,” Camberos said.
Ipsy’s competitors — like Sephora Play or Birchbox — have undergone multiple iterations and business troubles. In 2020, Sephora said it could wind down the Sephora Play subscription box offering in favor of “Sephora Favorite” sets of products, available at different price points. In 2021, after multiple retail expressions and rounds of layoffs, Birchbox was acquired by a health care company, and remaining cofounder Katia Beauchamp departed the CEO seat to turn into a strategic adviser to the business.
In 2019, Ipsy launched its first brand — Complex Culture, which makes makeup brushes. That brand-building division eventually became an incubator, called the Madeby Collective, which went on to launch influencer Addison Rae’s Item Beauty, and pop star Becky G’s Treslúce Beauty. The division also launched subscription personal care brand Refreshments, which sells shaving kits and body wash, amongst other products.
In 2020, the corporate acquired subscription competitor BoxyCharm. Together, the 2 businesses were slated to tug in greater than $1 billion in sales for the yr.
The business rebranded, and have become BFA. BFA declined to share updated sales information, apart from to substantiate that sales in 2021 grew. The corporate also declined to share current subscriber counts for the Ipsy and BoxyCharm businesses. Camberos said that 2021 was a yr that included internal reorganization as BFA’s different segments, especially Ipsy and BoxyCharm, integrated operations to turn into one company.
Some BoxyCharm employees were laid off across the time of the acquisition, and the corporate cut more Ipsy and BoxyCharm staffers in November 2021, Camberos said.
With the combination of BoxyCharm, some roles became “duplicative,” Camberos said.
“Whether it’s marketing team or brand partnerships team or engineers coding up the web site, if you take a look at all the pieces and as all of us get on the identical system, which we now are … there’s just redundancies which can be created. It was more a function of bringing the teams closer together under one platform, under one roof,” Camberos said.
Ultimately, Camberos said the goal was to provide brand partners a more seamless experience. Brand partners “desired to confer with one person,” he said — “they didn’t wish to get a call from Ipsy and a call from BoxyCharm to bring samples or herald latest products.”
“That’s an example of where we integrated and we will provide a greater service,” Camberos said.
Now, the integrated beauty operation has raised $96 million led by TPG Growth, which first backed Ipsy in 2015.
“It was good timing with the markets being weak without delay,” Camberos said. “That’s just an enormous show of religion from our investors in our business, in our team, in our opportunity. And in a tricky market environment, you should raise as much money as possible so you may really go in aggressive and proceed to grow.”
Moving forward, BFA plans to concentrate on further developing its technology and personalization capabilities, expanding retail distribution and international growth. The business recently launched operations in Mexico, and Rae’s Item Beauty debuted with Sephora in 2021.
Launching more brands is just not high on the priority list, Camberos said. The corporate plans to spend $25 million supporting Black and Latinx-founded brands in 2022, and can look to launch Becky G’s Treslúce Beauty and Refreshments in retailers. BFA can even proceed specializing in personalization.
“The higher we personalize, the more people stick around and the more that individuals buy from us,” Camberos said.
“We’re going to take slightly little bit of a breather — we launched Refreshments, Item beauty, Treslúce after which we acquired BoxyCharm,” Camberos said. “Straight away, we’re sort of more in consolidation, ensuring we’re delivering we’re delivering an ideal experience across all those different areas.”
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