- Amidst a hot investment market, "minimalist" beauty brand Merit has raised $20 million in a Series A funding round led by L Catterton, the company said in details emailed to Retail Dive. Marcy Venture Partners and Sonoma Brands participated in the round as well.
- The beauty brand was founded by Katherine Power (also the CEO), who also founded media company Who What Wear, skincare brand Versed and natural wine label Avaline.
- Since its debut in January, the company has seen "exponential growth." Merit has invested in both its DTC channel and wholesale, with plans to expand into more than 800 Sephora stores by the end of the year.
Merit has been moving fast since launching with its "five-minute morning" color cosmetics offering in January. Just a month after its debut, the brand began selling in Sephora, and it will be offered in several hundred stores by its one-year anniversary.
Sephora is the brand's primary brick-and-mortar focus right now, but Aila Morin of Merit told Retail Dive they would "never say never to additional opportunities" in the future. Whether through retail partners or geographic expansion, Morin said the company has "a lot coming down the pipeline."
This funding will support the brand's continued growth, including expansions into new categories like accessories, hair, fragrance and skincare. The company plans to continue emphasizing sustainability and a simplified routine in whatever segments it enters.
"We really created the antidote to the overwhelming saturated world of beauty. We felt there were too many steps — there were 50 shades in an eyeshadow palette, and we knew how to use one," Morin said. "We knew we had to simplify what it meant to get ready. There was this clear dissonance, I think, for our team, between beauty marketing and what our routines actually looked like. Minimalist beauty for us was much more of a philosophy than a category, and we felt that was really resonating with our consumer, who is millennial and Gen X."
Because of the company's focus on essentials, Merit is rapidly expanding into new categories rather than going too deep into one segment. The brand plans to launch just three to four net new products a year, Morin said, much slower than the cadence of most beauty brands. Morin noted that "lifestyle categories" are on the horizon as well as it looks to offer more essentials elsewhere.
"One of the things we have been most cognizant of is that if you're only intentionally launching essentials, you can't really launch duplicates or go too far into a category, and then you're no longer in essentials," Morin said. "So we have looked at other categories based on obviously behavior and data, but also based on where we think our consumer is looking for newness, and where she's looking for a minimalist beauty approach."
Morin shied away from giving specifics on the brand's performance so far but said Merit has seen "great success" and sold a product every 17 seconds on launch day. "I would say that momentum has not slowed down up until today."
The company operates at a price point between $24 and $38 per product, which it says encourages repeat purchases. Morin said customers have been buying entire beauty routines from Merit instead of one-off products, which has been key to success.
Another of Power's businesses, clean skincare brand Versed, launched at 1,400 Target stores in 2019. At the time, it advertised price points under $20. A Merit spokesperson said Versed and Merit are separate businesses that do not share a holding company.