[THE INVESTOR] South Korean online beauty retailer Memebox on Wednesday said it secured some $66 million in new funding from global venture capital funds Formation 8, Goodwater Capital and Pejman Mar Ventures.
The latest round of funding drives up the total investment raised by Memebox to about $100 million, the most ever for a Korean beauty start-up, the company said. It plans to use the new capital to finance its service upgrades and global expansion.
The view inside the first Memebox offline store, which opened last month in Gangnam, Seoul. Memebox
“Memebox has redefined how beauty companies operate in order to respond to the needs of today’s mobile and product-conscious consumers. It represents the future of the digitally powered consumer brand revolution,” said Brian Koo, the founder and CEO of Formation 8.
“It is extremely rare for a start-up to secure some $100 million in investment from Silicon Valley,” said Memebox co-CEO Ha Hyung-seok. “We credit our funding success to the expansion of mobile services and the cosmetics industry over the past 4 1/2 years.”
Membox was launched in 2012 as a subscription-based delivery service provider, partnering with Korean cosmetics-makers to provide free product samples to customers in return for consumer feedback.
The following year, it became the first Korean start-up to secure funding from Silicon Valley-based start-up accelerator Y Combinator, through which it was able to score large-sum investments from global venture capital funds and high-profile investors such as Yahoo cofounder Jerry Yang.
A person opens the Memebox mobile app on a smartphone. Memebox
Since January 2015, the company has transformed into a mobile e-commerce platform that sells some 170,000 cosmetics and beauty products at discounted prices. Around 83 percent of its online sales are generated via its smartphone app, which has seen more than 4 million downloads.
Memebox has a strong presence in Korea and is also seeing steep growth in China and the U.S. On the back of rising global demand for Korean cosmetics, Memebox saw its revenue increase 1,200 percent on-year in China and 490 percent in the U.S., the company said.
Looking ahead, the Korean start-up’s latest projects include the introduction of Memebox’s own in-house cosmetics brands and offline stores showcasing products launched by the company, the firm said.
Last year, it launched four in-house brands, including Pony Effect in conjunction with Korean YouTube star and makeup artist Pony. The firm, which releases a new product every week, plans to establish two more brands within this year.
Eyeing new opportunities in the offline-to-online business, Memebox opened its first brick-and-mortar store for its in-house brands in Gangnam, southern Seoul, last month. It is planning to open four additional stores in the country by September.
“We see our offline stores as an extension of our online platform,” said Ha. “We have proven that user satisfaction in our offline stores leads to heightened profits in our online and mobile sales.”
By Sohn Ji-young/The Korea Herald (firstname.lastname@example.org)