Drunk Elephant, a skin-care brand that's one of the fastest-growing lines at Sephora, has just secured a round of investing that includes funding from San Francisco-based private equity firm VMG Partners and Man Repeller's Leandra Medine, reports WWD.
The Houston-based company, which launched in 2013, sells a tightly edited range of skin-care products that have garnered a devoted following on the internet and among beauty editors. Fans flock to the brand for effective formulations, marketed as using only "clean" ingredients — not to mention the Instagram-friendly packaging. In an interview with WWD, the company's founder, Tiffany Masterson, stated that Drunk Elephant is young, majority family-owned company, and with that in mind, there are no plans to sell the company soon. "We are scaling up in every way in order to take on the challenge of global expansion," she added in a comment to Fashionista. "I think there's a movement toward preventative approach away from 'treatment' approach in all areas of health; it's a clean wellness movement, and we want to help lead it."
This notion of expanding and building a business without the goal of immediately selling it to one of the beauty-industry giants is becoming somewhat of a trend. For other cosmetics companies — recent examples include Becca Cosmetics, Too Faced and It Cosmetics — the strategy of remaining independent until the brand has become established as a major industry player in its own right has paid off overwhelmingly. (Estée Lauder was said to have purchased Becca Cosmetics for roughly $200 million and to have acquired Too Faced for $1.45 billion; L'Oréal acquired It Cosmetics for $1.2 billion.) But aside from the big payout, there are other reasons why a company may choose to maintain a certain level of autonomy as it grows. Not only does it allow the business leaders to shape the direction and messaging of their brands, but it can also help cultivate more of a niche feel consumers can relate to.
As one of the fastest-growing brands in Sephora's retail history (a source confirmed that fact to WWD), Drunk Elephant is uniquely poised for success. Beauty giants like Estée Lauder have struggled to grow the skin-care category of their business in recent years, often citing millennial shoppers' desire for immediate results as an obstacle. So while Drunk Elephant may one day be able to cash in on its success in that realm by selling to a larger industry player, that still seems to be a ways down the road.
Fashionista has reached out to Leandra Medine and will update this post with any further comments.
Homepage photo: @drunkelephantskincare/Instagram