Online cosmetics retailer Memebox raises $65.95 million
August 9, 2016 03:16 PM
San Francisco-based online beauty brand Memebox (pronounced mee-mee box) today announced that it has closed a $65.95 million funding round led by new global investor Formation Group and previous investors Goodwater Capital and Pejman Mar Ventures. The latest round brings the company’s total funding to nearly $100 million over four rounds.
Memebox, which sells online, via a just-opened store and in other bricks-and-mortar stores in Asia, says it will use the money to expand into new markets and develop new products, among other goals. Most of the new cash, according to Arnold Hur, president of Memebox USA, will be devoted to expanding Memebox’s lineup of branded product lines.
Within the past year, Memebox launched four brands, adding a total of 540 SKUs. Memebox has plans to launch two more brands by the end of the year, including a line of dust-free cosmetics, Hur says. In total, Memebox sells more than 170,000 SKUs, including its own brands and the other brands it sells. Dust-free cosmetics, which are popular in Asia, are designed to prevent dust—and the associated toxins—from reaching the skin.
From the second quarter of 2015 through the second quarter of 2016, Memebox’s gross sales reached $150 million. The company says sales in China grew 1,200% year over year, while U.S. sales grew 490% in the same period. Hur declined to provide dollar amounts for those markets but said the company, which was founded in South Korea in 2011 and moved to California in 2014, derives most of its revenue from the U.S. and China. Hur declined to project sales growth for the next 12 months. The average order in the U.S. is between $40 and $50, the company says.
Memebox says 83% of its sales come from its mobile website or its mobile app. The retailer has emphasized mobile from the start because that is how its young target market—more than 50% of Memebox’s traffic comes from 18-24-year-olds—connect to the web, Hur says.
“A lot of our customers have never touched a desktop computer,” he says.
Since launching, the Memebox app has been downloaded more than 4 million times. The company also maintains an active social media presence. The retailer has generated more than 70 million Facebook video views so far this year and has more than 2 million followers on Weibo, a Twitter-like online community in China. Memebox says it has 4 million social media followers globally.
“We absolutely test every online channel” to reach customers, Hur says.
Data also is key to Memebox’s strategy and helps drive product and brand development. “It’s not that the computer tells you what brands to make,” Hur says, but Memebox analyzes of customer data in nearly every decision it makes, he says.
The company combs through millions of data points to identify emerging beauty trends and says its technology allows it to identify the market demand for new products 12-18 months before consumers make clear they want a particular product.
One example is its line, “Pony Effect,” developed in conjunction with YouTube beauty celebrity, Pony. Memebox’s first eyeshadow released under the Pony Effect brand sold 20,000 units in the first 45 minutes of availability, the company says.
Memebox recently opened its first stand-alone shop in Seoul, South Korea. It also sells its products in physical Watsons Personal Care Stores in Asia and says it will continue to investigate selling at other retail stores.
Memebox employs about 500 people worldwide, mostly in Korea, where it does its manufacturing and distribution, Hur says. It has about 60 staffers in the U.S. and wants to double that in the next year.
Memebox is a “graduate” of the Y Combinator startup incubator in Mountain View, Calif. That experience, Hur says, has been “extremely important” to the company’s growth so far.
“Only in Silicon Valley do you see brands go global so quickly,” Hur says.