After opening 16 Color Bars in 2020, DTC hair color brand Madison Reed on Wednesday announced a $52 million funding round led by True Ventures. The money will go toward fueling its "omnichannel expansion," according to a company press release.
Other investors included Norwest Venture Partners, Comcast Ventures, Shea Ventures, Goldman Sachs, Motley Fool Ventures, Portfolia Rising America Fund and Portfolia FirstStep Fund.
Madison Reed saw 130% growth in 2020, according to the company, and nearly doubled its customer base. The brand announced in 2019 that it planned to open 600 of its Color Bars through a franchise joint venture with consulting firm Franworth, with that number sold or open by 2024.
With more consumers working from home and buying online, Madison Reed has seen the upside. The DTC hair color company launched a men's hair color line in 2020, as well as a color-depositing hair mask, and during the peak of the pandemic saw customers buying its hair color kits every five seconds.
"What 2020 demonstrated is something we've always known: hair color is a category that's essential to every woman," Madison Reed founder and CEO Amy Errett said in a statement, noting that business has "surged" over the past months.
The company sells through its own site and stores, but also has an exclusive wholesale deal with Ulta, which Errett told Retail Dive in July would likely be the destination for its men's line as well. At that time, Errett said the company planned 20 Color Bars by the end of the month and 27 by the end of the year. It seems the company has stuck to that timeline, as it now has 30 stores, according to the release, and will have 60 by the end of 2021.
Errett told Retail Dive in July that the pandemic has done nothing to quench its interest in opening physical stores, despite growth in its online and subscription services, and its initial plans for 600 stores had not changed.
"It's not going to be forever that she doesn't want someone else to color her hair sometimes," Errett said then. "We're not wavering off of that thesis — and remember, we have a ton of customers that do both."
As the pandemic has pushed consumers online more, the company has also responded with features to appeal to shifting behavior, including video consultations with colorists and Hair Color House Parties, where a Madison Reed colorist teaches customers over Zoom how to color their hair.
"We believe consumer behaviors have changed forever and this category is in the epicenter of that change," Errett said in a statement.