Yesterday it was announced that Glamsquad, a New York based on-demand beauty startup has closed USD$7 million in funding, adding to the $2 million raised last year. Glamsquad is headed up by Alexandra Wilkis Wilson, co-founder of global fashion company GILT Groupe, who joined the startup this year as co-founder and CEO. Those participating in the latest round include AOL’s BBG Ventures, Montage Ventures and Lerer Ventures.
In simple terms, Glamsquad offers on-demand services around hair and makeup. In a similar fashion to Uber – or closer to home, our own startups like Airtasker – users use the app to book an appointment and Glamsquad sends a qualified individual over for a blow-dry or makeup related service. Customers then use the application to pay for the service, so no cash changes hands.
Glamsquad does have some stiff competition. Some of its competitors include startups like Madison Reed (which specialises in sending colourists directly to users), The Stylised (which sends stylists to your door) and Priv, who are perhaps the most direct competitor, also offering blow-drys in addition to manicures, private pilates training and other services to ‘get you red carpet ready’.
Glamsquad is part of the growing trend of startups that operate in the ‘connection economy’. Other startups that fall into this category include Uber, goCatch, Airtasker, Sidekicker, Road Angels and SuitBids, to name just a few.
To date, Glamsquad has completed just over 10,000 services and events, and the capital will go towards building the core team and stable of beauty related offerings available to clients. The big point that we need to take into consideration when looking at a startup like Glamsquad, is that in comparison to local salon pricing, it is extremely competitive, on par, if not cheaper than a traditional blow-dry or makeup session.
Like most connector businesses, Glamsquad has been concentrating on dominating its local market first – in its case, New York. Connector businesses in Australia have increasingly been employing the same approach, focusing on a single city and expanding once the model is right and demand is there.
Some commentary has suggested that Glamsquad is in many ways capitalising on the success of blow dry focused bars that have been growing rapidly around New York, specifically the chain ‘Dry Bar’. Back in Australia, we too have a fast growing blow dry culture emerging, with Australian based and founded Blow Dry Bar now in multiple locations across the east coast of Australia stretching from Brisbane to Melbourne. Blow Dry Bar is now franchising stores to accelerate its growth rate.
However, it is curious that a service like Glamsquad has not yet made an appearance on our shores yet, at least not one of note that has all the elements to achieve scalability. Whilst I am sure that many hair and makeup professionals do offer ‘we come to you’ services – these small or freelancer businesses are not exactly startups.
Yet, with the right technology behind them, anyone could build the local version of Glamsquad quite easily. The Australian hair and beauty industry according to latest reports by IBIS World is a AUD$4 billion market that employs over 81,000 people across the country.
Within this segment, the niche focus that makes up most of that revenue is cutting, styling and colouring. And two of those are very ‘Glamsquad’ focused activities. Looking at the statistics, other services like manicures and tanning would also be a service that would work in an Australian focused market, accounting for the next highest spending outside of hair.
There is a real opportunity in Australia for an entrepreneur to take services that already exist in the small business space, and systemise it to make it easier for consumers to connect with beauty professionals in an efficient and cost effective manner. The key to succeeding though relies on the technology behind the application being able to compete with a company like a Glamsquad should it ever launched into the local market – which we know is a high possibility. Wilson has already openly expressed that Glamsquad is going to be a global company.