- Birchbox has sold a majority stake in the company to one of its investors, hedge fund Viking Global Investors, according to a statement from CEO Katia Beauchamp emailed to Retail Dive on Wednesday.
- According to Recode, which first reported the news per multiple sources, the deal came after the hedge fund agreed to invest another $15 million in the beauty startup, which reportedly has tens of millions of dollars in debt, the sources said. Birchbox's other investors are expected to walk away from the company with empty pockets.
- Under the terms of the deal, Beauchamp will remain the CEO of the company and there will be no layoffs or changes for employees, a Birchbox spokeswoman told Retail Dive.
Birchbox has been trying to sell itself for a while. In August, Walmart was even rumored to be a potential buyer. More recently, the company was reportedly in serious talks with QVC in what would have been a fire sale, multiple sources told Recode, adding that under such a deal, Beauchamp would no longer run the company.
"As an independent company with renewed investment, we are in a position to actively pursue plans that help further our mission and fuel our ambitious goals in the U.S. and in our global markets," Beauchamp said. "As part of that strategy, we are prioritizing product innovation, the evolution of our digital experience, and scaled partnership opportunities."
Since its launch in 2010, Birchbox has raised nearly $90 million from investors and was once valued at nearly $500 million, according to Recode. The beauty brand has since scaled to operate in six countries, with two permanent brick-and-mortar stores in New York City and Paris. According to Beauchamp, the company has more than 2.5 million active customers and partners with 800 brands. Last year was a "record-breaking year for subscriber acquisition," she said Wednesday. However, accumulating more customers doesn't necessarily translate into higher sales or overall company profitability.
Last April, the company told Retail Dive it had reached profitability. However, the year prior had been rocky for the business. After struggling to raise more funding, Birchbox pulled back plans for growth and underwent several rounds of layoffs.
With a hedge fund now supplying a steady flow of cash to the business, Beauchamp said the next phase for Birchbox is about "amplifying the impact we can have on our customer and accelerating our growth as a company."