Have you ever wanted to invest your hard-earned money in a brand that you believe could be highly profitable, but have absolutely no idea where to start?
In recent times, there has been a tremendous increase in people looking to invest in beauty brands. The recent acquisition of a majority stake in Go-To Skincare by BMX Group for $89 million and the announcement that Adore Beauty’s revenue increased by 48%, adds weight to the strong appetite for investment in disrupters of the beauty industry.
So how do you get your foot in the proverbial investment door? In exciting news, tbh Skincare is offering an attractive early-stage prospect for its fans. Co-founded by now 25-year-old Rachael Tyers and launching at the start of the pandemic in March 2020, tbh was designed to address the rising cases of persistent adult acne and has seen an incredible $800k+ in revenue within 16 months.
Below, we chat to Tyers, who tells us all about the new offer, as well as her view on the ins and outs of investing for beginners.
It’s such exciting news that you’re inviting consumers to invest in tbh Skincare! How did this idea come about?
Well tbh has had such amazing growth in its initial 16 months to date, but we achieved this off quite a small initial investment and in order to really accelerate the growth of the business we realised we needed an extra injection of funds. We did have the option to do this privately, but we loved the concept of being able to keep the company community driven and community owned with a platform like Equitise.
Equity crowdfunding is essentially a way for everyday investors, or your ‘mum and dad’ investors to buy in to early-stage businesses that they really believe in. We just loved the thought that our customers could actually own shares in tbh and share in our future successes.
Can you tell us how equity crowdfunding platform, Equitise works?
So we are aiming to raise a minimum of $300K and a maximum of $800K. Anyone who is keen to invest in the offer can currently register their interest via the Equitise landing page. The offer is released to this waitlist who will have first access to invest, and if we do not reach our minimum in this stage the offer will be opened up to the broader public for investment.
We are planning to launch to Expressions of Interest next week and it will stay in this stage for two to three weeks. Basically the investment process is super easy. You just sign up to Equitise’s platform and deposit the funds, it is really as simple as that. Once the offer is closed we will then issue shares to all of our new investors. Super exciting!
What do you hope to achieve by getting fans of the brand involved?
I think equity crowdfunding is great for the investor but it is also great for us. We get a huge community of people who are literally invested in the company and that creates an amazing group of advocates for us. In turn, we give those people who already support us an opportunity to tangibly share in our successes. So really it is such a win, win situation and just fitted us perfectly for the stage of business we are in right now.
Why do you think there’s a growing appetite for investment in beauty brands?
I mean we only need to look at the recent sale of a majority stake In Go-To Skincare by BWX to understand why there is a growing appetite for investment in beauty, specifically skincare brands. It is a growing market, and a huge one at that.
The global anti-acne cosmetics market size was valued at US$2.3bn in 2020 and is expected to grow at a CAGR of 9.1% from 2021 to 2028. Australia is at an early stage in the online shopping adoption curve. With online beauty shopping currently representing approximately 11% of purchases in Australia’s $6 billion beauty industry (less than half of the UK’s 28% online penetration), this represents a significant growth opportunity for us at tbh.
Globally, there has been strong M&A and fundraising activity in the digitally-native health and beauty and skincare markets, reflecting the strong potential of this industry to continue to threaten the market share of larger pharmaceutical incumbents as consumer buying behaviour changes. Significant premiums have been paid for niche skincare brands with strong customer loyalty and attractive online presence. I think this is why we are seeing an increasing interest in early stage investment for beauty brands. There is so much growth opportunity in this space.
Do you think consumers should look for anything in particular when deciding to invest in a brand?
I think at the very core the product or brand has to be differentiated in some way. At tbh, our treatment of breakouts is completely novel and scientifically backed. Our brand is positioned in a very niche part of the market and I think this really helps us differentiate from our competitors.
I think as well it is important to look for metrics that indicate existing and future success. For us our repeat customer rate is one of these key metrics that shows we have a business essentially. We just need the ability to scale it.
Also, I definitely think the people and the team behind the business are a huge part of choosing a company to invest in. A huge part of our first year in operation at tbh has been finding the right people, who are experts in their field, to look after certain niches within the business. We have such a strong foundation for success because we have outsourced where necessary and developed a team that is able to underpin our growth targets moving forward.
Is there anything you think investors should avoid?
Never overexpose yourself. I think that whatever you invest you need to be prepared to lose, especially when it comes to the likes of equity crowdfunding which is a high risk, high reward sort of concept. I also think that it is great to keep your portfolio diverse, so I would avoid putting all of your eggs in one basket so to speak. It is smart to invest your money in a lot of different places and will protect you a little more if one of them doesn’t come off.
Where do you see the future of consumer-investing heading?
I am not the expert on this but see my comments below.
I think we will continue to see methods such as equity crowdfunding continue to grow in popularity as people become more familiar with the concept. I think that as the popularity of these opportunities increase, so will the amount of offers available. I also think investment in tech and consumer interest in things like cryptocurrency will continue to rise as well.
How exactly do people go about investing in tbh?
The best thing to do is to sign up to the Equitise Expression of Interest page here. There is about a week left to sign up before the offer is opened up to this group of people. We now have 600+ people on the waitlist so there is a chance that we will max out the raise at this stage and not go public at all.
Once you are signed up you will be notified when the offer is live and you can invest via the Equitise’s platform. Super user friendly and very easy to do! Once the deal is closed the investors will then be issued their shares in tbh. Super exciting!