There was plenty of online consternation about whether someone whose parents and siblings are famous and highly connected television stars worth tens of millions of dollars in their own rights could ever accurately be described as "self-made." But I didn't see anyone arguing with Forbes' estimate that Jenner's company, called Kylie Cosmetics, generated $360 million in revenue in 2018. Or its statement that Jenner (who turned 22 in August) owned the whole business.
Forbes also estimated that Kylie Cosmetics was worth at least $900 million. In a new deal announced this week, we discovered that was a conservative figure.
Jenner agreed to sell control of her startup to an established cosmetics giant, the latest deal in a stretch that's been studded with activity in the broader beauty industry. And that's one of 9 things you need to know from the past week:
1. Beauty bucksIn the spring of 2015, at the height of a weird social media fad called the "Kylie Jenner Lip Challenge" that I'm going to avoid describing in detail, Jenner admitted to receiving injections to plump her lips. Just your typical instance of a 17-year-old being asked to make public declarations about her plastic surgery choices. Anyway, in November of that year, Jenner capitalized on the whole to-do by selling her first beauty products, called Kylie Lip Kits. And thus an empire was born.
Soon, Jenner officially launched Kylie Cosmetics and formed a partnership with ecommerce company Shopify—a deal arranged by the budding mogul's mother, Kris Jenner, according to a Forbes story from 2018. Thanks in part to artful promotion by the younger Jenner, it was an immediate hit. Kylie Cosmetics quickly began generating hundreds of millions in annual revenue, using a model focused on online sales and occasional experiments with pop-up locations.
It caught the attention of the broader industry. This week, established beauty giant Coty (the owner of CoverGirl and other brands) agreed to acquire 51% of Kylie Cosmetics for $600 million, reportedly valuing the company at just shy of $1.2 billion. Jenner will retain the rest of her stake, and she'll remain involved in terms of both product and promotion. But the world's youngest billionaire has opted to give up control of the business she built.
Three days after the announcement, Reuters reported that Coty is considering the sale of some of its major beauty brands for as much as $7 billion, with Unilever and private equity firms Advent International and Cinven said to be in the running. It was Jenner's deal, though, that dominated headlines.
In and out in four years with $600 million to show for it, plus the chance to keep doing all the fun stuff at the company without actually being in charge? It's the sort of turnaround entrepreneurs and VCs dream of. Say what you will about the celebrity founder, but she sure seems to know how to run a business.
Jenner's big move is the latest development busy year for high-profile beauty startups. Earlier in November, the Drunk Elephant skincare brand completed its sale to a subsidiary of Japanese cosmetics company Shiseido for $845 million. In March, Glossier raised $100 million in Series D funding at a $1.2 billion valuation from investors such as Index Ventures, Sequoia, Thrive Capital and Tiger Global. If you want to include clothing in the beauty sector, there was also The RealReal, the dealer of secondhand luxury apparel that raised $300 million with an IPO in June. And Rent the Runway, a renter of high-end clothes, collected $125 million in March at a $1 billion valuation.
In addition to having a combined value of over $5.5 billion, it's perhaps worth noting that Kylie Cosmetics, Drunk Elephant, Glossier, The RealReal and Rent the Runway were all founded by women.
This week also brought two smaller deals involving startups in the business of helping people look good. In New York, a company called Studs announced its launch with a $3 million seed from First Round Capital and Lerer Hippeau to finance a new retail chain focused specifically on piercing ears, with a goal of offering higher safety standards than shopping malls and more focused expertise than other tattoo and piercing shops. A press release announcing the round uses the phrase "curated earscapes," a bit of imagery I've been struggling all week to forget.
Across the pond in London, a direct-to-consumer startup called Kimaï raised $1.2 million in seed funding led by Talis Capital to fund its headline-grabbing operations: The company makes jewelry out of lab-grown diamonds and recycled gold. Founded last year, it already claims names like Meghan Markle, Emma Watson and Jessica Alba among its customers.
Believe it or not, this is at least the second diamond-focused investment made by VCs in the past four months. In July, Kleiner Perkins led a $10 million investment in Dust Identity, which deploys minuscule bits of diamond dust to create one-of-a-kind security tags for tracking items throughout a supply chain.
Maybe Coty will soon call on the startup for a little help in keeping track of its Kylie Cosmetics shipments.