After a decade of beauty boxes, Birchbox’s fire sale

i 4 90692072 birchbox reinvents itself again as a healthcare company

For a decade, we’ve recognized Birchbox as a beauty model that delivers samples in fairly bins. However its current $45 million acquisition by FemTec Health, a new female-focused startup, marks a main turning level for the corporate.

Birchbox cofounder Katia Beauchamp will depart her put up as CEO and promote her remaining stake within the enterprise to grow to be a strategic advisor. FemTec plans to relaunch Birchbox as a product-discovery service that goes past beauty, increasing into private care and wellness. Birchbox’s journey during the last 10 years mirrors the shifting beauty panorama—but additionally reveals some inherent pitfalls within the subscription mannequin.

[Photo: courtesy Birchbox]

Birchbox launched in 2010 as a month-to-month subscription field that gave girls (and ultimately males) a curated choice of beauty samples. The bins solved a particular drawback: In a world the place individuals have been more and more purchasing on-line, Birchbox allowed customers to pattern beauty merchandise at house, very similar to they might at a department-store beauty counter. After they discovered merchandise they favored, they may purchase full-sized variations on its market. The idea shortly took off, permitting Birchbox to lift almost $100 million in VC funding over the subsequent decade. Birchbox additionally impressed a whole lot of different copycat subscription bins for every little thing from intercourse toys to socks.

However the acquisition value for Birchbox, which was as soon as valued at almost half a billion {dollars}, is lower than half of the funding it took on.


Lauren Bitar, head of insights on the analytics agency RetailNext, mentioned Birchbox struggled to search out a enterprise mannequin that actually labored. She factors out that the aim of the subscription was to assist customers discover merchandise they favored. However as soon as this occurred, they didn’t want the subscription field any longer. And since they may buy these merchandise anyplace, they didn’t want to stay with Birchbox.

“It’s a troublesome mannequin to maintain up long-term,” she says. “Clients would ultimately really feel inundated with new merchandise.”

Beauty subscription bins have been simple to repeat, shortly resulting in fierce competitors out there. Ipsy supplied month-to-month samples, however it additionally leveraged a military of beauty influencers on social media to maintain customers linked to the model, and now has 3 million subscribers. And larger beauty retailers like Sephora and Ulta additionally launched bins that have been nearly similar to Birchbox, which reportedly has round 300,000 subscribers.

Bitar says that whereas the subscription mannequin alone isn’t sufficient to maintain a model afloat, corporations which have mixed subscription commerce with expertise or content material have fared higher. FabFitFun, for example, a quarterly field that delivers a choice of life-style merchandise together with a journal and digital content material, has generated 2 million energetic subscribers. Sew Repair, which sends month-to-month or quarterly bins, has 4.2 million.

“Sew Repair is successfully a data-science firm that has managed to curate garments that its clients actually like,” Bitar says. “In addition they meet the wants of individuals within the center of the nation who don’t have entry to some of these manufacturers. The subscription mannequin can work, however it may possibly’t be the core promoting level.”

Birchbox ultimately moved into retail, launching its personal shops that targeted on sampling and curating beauty merchandise. In 2018, it offered a minority stake of the enterprise to Walgreens, and partnered with the pharmacy to launch Birchbox branded in-store experiences. When Birchbox launched, it was comparatively cheap to accumulate clients on-line. However the fee to accumulate clients grew to become steeper as extra gamers entered the market, so it made sense, Beauchamp mentioned, to open shops that may immerse new clients on this planet of the model and generate income. Nevertheless, the pandemic threw a wrench into retail expansions.

The best worth Birchbox presents FemTec is probably going its clients and e-mail database, since Birchbox has constructed sturdy model recognition within the market and FemTec is a brand-new participant. “If FemTec desires to create client merchandise, having a trusted model identify like Birchbox will probably be a enormous asset,” Bitar says. “Birchbox spent a decade on branding, and this would possibly effectively be definitely worth the acquisition value to FemTec.”


Birchbox’s new chapter

FemTec was based in 2020 by Kimon Angelides, a physician who wished to enhance girls’s healthcare with the assistance of expertise like AI and genomics. It raised $38 million in funding from corporations like Walgreens, Unilever, and Estée Lauder, at a valuation of $380 million. FemTec launched publicly in October 2021, and expects to serve girls throughout many dimensions. It’ll launch Superior Girl, a telehealth platform to assist girls navigate complicated healthcare points, from being pregnant to menopause, and promote a direct-to-consumer complement model.

FemTec may even supply beauty services. “The concept is to convey healthcare into the beauty sector and vice versa,” says Kim Capone, chief scientific officer, who got here to the model from Johnson & Johnson, the place she labored on microbiome merchandise. “We’re creating a digital house for ladies the place they’ll discover entry to telemedicine, Rx, dietary supplements, probiotics, and thru Birchbox we’ll convey beauty into the fore.” Along with Birchbox, FemTec has acquired Mira Beauty, a tech startup that makes use of AI to match customers with beauty merchandise, for $28 million.

[Image: courtesy Birchbox]

Beauchamp says she has been fascinated by the intersection of beauty and wellness for a while, as the 2 industries have more and more overlapped. Some beauty manufacturers now promote dietary supplements designed to enhance pores and skin and hair, and the clean-beauty motion has shined a mild on the components in merchandise.

Birchbox will live on as a separate model below the FemTec umbrella, and Beauchamp says some of its clients could not even understand it has been acquired. However the two manufacturers will associate on merchandise.

[Photo: courtesy Birchbox]

To get a sense of how the manufacturers will collaborate and weave collectively beauty, wellness, and expertise, they shared particulars about their first three bins. This week, they launched a $129 Birchbox Meets Superior Girl equipment, which will probably be delivered in three Birchbox-style bins. The primary field will include a skin-test software generally utilized in medical trials to assist clients determine their pores and skin kind. Then, after they enter information about their pores and skin, they’ll obtain two extra bins that include merchandise curated by Birchbox, together with dietary supplements from Superior Girl tailor-made to their pores and skin.

This equipment received’t change the month-to-month Birchbox, however it is going to be marketed to Birchbox’s subscribers, in addition to by way of Superior Girl. Beauchamp says it’s simply the tip of the iceberg, and there will probably be extra high-tech well being and beauty experiences to come back.

Ultimately, FemTec could be Birchbox’s remaining evolution. For Beauchamp, the previous 11 years have been a rollercoaster trip. “I went into Birchbox anticipating, as all entrepreneurs do, that constructing it might be very arduous,” she says. “However I couldn’t have imagined all of the various things that you would need to find out about to be a firm that has endurance.”