There is a very simple reason why Allure Media just put $6 million into bellabox
Everyone keeps calling bellabox a beauty box company. It’s not. bellabox is a media company, no matter how you slice and dice it. That is why an investment from one of Australia’s fastest growing media companies makes perfect sense. Allure Media is a Fairfax-owned subsidiary that operates with complete independence, after parent company Netus set up by entrepreneur and investor Daniel Petrie, was acquired in 2013. Allure publishes titles such as Business Insider and Lifehacker.
Founded in October 2011, by twin sisters Sarah and Emily Hamilton, bellabox has grown rapidly in three short years to become the leading beauty subscription service in Australia with 70 percent market share.
bellabox is the clear leader in the Australian space when it comes to subscription beauty boxes. They have 40,000 active subscribers across Australia and Singapore who pay a monthly fee of AUD$15.00 and SG$19.95 and receive a themed box of a dozen different beauty and lifestyle-related products every four weeks. Based on these figures, and given active subscribers are paying at least the standard amount, it would be safe to say the revenues for bellabox are in the vicinity of about $550,000 per month.
Most of bellabox’s competitors have failed to gain the traction that the Hamiltons have been able to achieve. In Singapore, startups such as VanityTrove which also have a weak presence in Australia have pivoted from the sampling experience and become almost a beauty aggregator / newsfeed of sorts. Her Fashion Box is obviously one of the stronger competitors that is still around, and there are murmurs of a pending capital raise, but nothing solid as of yet. Of course Marie Claire have also just launched their quarterly beauty box called The Parcel, which is sent out in conjunction with the seasons – this is also a media extension to Pacific Magazines offerings.
When Startup Daily spoke with co-founder and CEO, Sarah Hamilton last week, she was very clear on the fact that she viewed bellabox as being a media company. The $6 million raised by the company from Allure Media will go towards paying outgoing shareholders; and well over $3 million dollars will be put into the business to fund a more aggressive growth strategy, including the hiring of more full-time staff in management positions and the potential launch into other markets across the Asia Pacific region.
This is why the investment is so strategic from where both parties sit. There is significant crossover between bellabox and a couple of Allure’s high performing products. For instance, Popsugar and Shopstyle currently attract over 1.4 million engaged visitors monthly who are of the same demographic that bellabox is targeting.
The new partnership allows both parties to extend their reach, with bellabox able to attract more customers and Allure Media able to offer more innovative solutions to beauty and lifestyle advertisers. It’s a classic win-win.
“Beauty brands know that sampling works, especially in conjunction with a solid advertising campaign,” says Sarah Hamilton.
“Sampling on street corners is still to this day one of the most effective advertising methods that beauty companies use when launching new products, bellabox help companies do this in a more systemised and scalable manner, we know our customers are actually using the products and always give honest feedback about those products.”
Brands love the targeted approach too. George Bingham, Director of Accounts at KORA Organics by Miranda Kerr says, “We know when consumers try KORA Organics they fall in love with our product so targeted sampling is one of our key strategies to generate sales for both our Australian retail partners like David Jones and for our own ecommerce site.
“bellabox is able to target our samples to the right demographic for KORA Organics. As bellabox members have paid to be part of the club, you know they are guaranteed to try the products in their monthly box. This beats sampling by traditional methods as these can be very expensive and do not always hit the right consumer,” he adds.
The current $6 million capital raising round follows the January 2013 round from a syndicate of tech, beauty, logistics and financial investors in Sydney and Melbourne, led by current investors, Yes To Carrots co-founder Lance Kalish and Trevor Folsom of Elevation Capital and including Square Peg Capital.
On the investment, Jason Scott, CEO of Allure Media said, “Like Allure Media, bellabox is a great business at a pivotal time in its development. There are many synergies between the two companies from the markets we operate in, to the audiences we attract. In combination, we offer the brands we work with a truly unique set of capabilities and expertise.”
Jason Scott, CEO of Allure Media, and Guy Reypert, Group Director of Fairfax Digital Ventures, will take up new board seats as Directors of bellabox, effective immediately.