When is a bottle of nail polish more than a $9 beauty accessory? When it comes in cutting-edge finishes that resemble suede, vinyl, and 3-D holographic glitter. And when the company that makes them -- Seattle-based Julep -- cranks out 300 new products a year and is the hit of Facebook, where rabid fans post selfies of their fancy manicures.
Julep's canny ability to tap the power of social media and apply the software industry's rapid-iteration model to the beauty business has been an attention-grabber since its 2007 startup as a single nail salon. Since then, the company's ecommerce sales have exploded - Forbes estimated earlier this year that Julep's 2013 revenue topped $20 million.
Now, Julep has more fuel for growth with today's news that the company landed $30 million in Series C financing, from venture-capital firms including previous investors Andreesen Horowitz and
Jane Park, CEO and founder of Seattle-based beauty startup Julep.
The new funding round brings the total raised by Julep to date to $56 million. New investors in this round include Madrona Venture Group, Azure Capital, and Altimeter Capital.
A makeup company might seem at first to be out of tech-focused Andreesen Horowitz's wheelhouse. But in an email exchange earlier this year, firm partner Margit Wennmachers discussed why Julep fits into their portfolio -- and why its marketing approach makes it "an obvious bet" to grow into the first big beauty brand built by social media.
"The beauty market is gigantic," Wennmachers noted. "It's estimated at around $160 billion, and it's dominated largely by offline brands. Their challenge is it's a much slower and more costly process to develop products and bring them to market -- they have to go through department stores. As a result, product refreshes happen just twice a year.
"Julep has a different approach. They source their own products and because they're online, they can bring products to market faster than traditional brands. As a result, they are very hip and trendy because they can respond to customer interest."
The final piece of the puzzle is the VCs' positive reaction to Julep founder Park, who previously was a Starbucks executive.
"Last but not least," Wennmachers says, "it's run by a determined team. Jane Park is phenomenally talented and knowledgeable about the market. That's why it's an obvious investment -- it's a big bet in a big market. The early traction they've gotten is phenomenal. They're an innovative e-commerce company and they also innovate on the product side."
