GlossGenius triples valuation, raises $25M to give beauty industry’s tech stack a makeover
Danielle Cohen-Shohet developed a tech platform to help spa, studio and salon industry owners manage their operations. She had seen firsthand the challenges of running a small business as a freelance makeup artist, one of her jobs while she was a student at Princeton.
So taught herself how to code, launched in 2016, raised $2.8 million in pre-seed funding from Techstars and angel investors, and bootstrapped her company, GlossGenius, for five years before closing a $16.4 million round last November.
GlossGenius has over 40,000 customers in the beauty and wellness space today and sees about $2 billion in annualized transaction volume on its platform, CEO and founder Cohen-Shohet told TechCrunch in an interview. The platform aims to be a vertical software “business-in-a-box” for beauty professionals, a goal Cohen-Shohet has previously likened to what Toast did in the restaurant industry.
After seeing “triple-digit” year-over-year percentage revenue growth since its last fundraise, GlossGenius has raised another round of capital, according to Cohen-Shohet. The New York-based startup nabbed $25 million in financing led by Imaginary Ventures and Bessemer Venture Partners, with participation from Left Lane Capital, which brings its total funding to $44.2 million since its launch back in 2016.
Cohen-Shohet said this latest round marks a 3x markup over the valuation the company earned in its November 2021 fundraise, and while she did not share the actual valuation number, she said it is in the “hundreds of millions” of dollars.
Over 70% of GlossGenius’s customers are women and a significant portion are underrepresented minorities, according to Cohen-Shohet. This is partially a feature of the industry — ownership in the salon and spa space comprises “more than two times the private sector average when it comes to women, African American and Asian business owners,” Cohen-Shohet said.
Helping small businesses run big operations is core to the company’s mission, Cohen-Shohet said.
“Zooming out from a single customer and this fabric we’re creating, it’s exciting that we are, in some way, an engine for economic mobility, for entrepreneurs from diverse backgrounds, and an engine for economic mobility for small businesses that is helping them play on the same level playing field as larger companies,” Cohen-Shohet said.
In a way, the pandemic turbocharged GlossGenius’s success. The platform automates many functions of both the back office operations and the client experience for its small business customers, including bookkeeping and finances, inventory management, online booking and email marketing.
“Post-pandemic, one of the things that became very apparent is that small business owners were more willing than ever to embrace the promise of digitization,” Cohen-Shohet said.
Customer acquisition has largely occurred through word-of-mouth, as GlossGenius doesn’t have any dedicated sales professionals on its team today, according to Cohen-Shohet. GlossGenius says that on average, its customers earn 25-100% more revenue as a result of using its product.
The company plans to use the new funding to grow its employee base of 150 with a focus on engineering, product and design as well as marketing, Cohen-Shohet said. GlossGenius also plans to continue investing in new product development, particularly for fintech functions.
Cohen-Shohet said the company has been “on a tear with product innovation” in the past few months, noting GlossGenius has launched a “no-show protection stack” to help owners reduce the number of appointment cancellations they’re seeing as well as a tap-to-pay embedded payments integration with Apple that allows employees to use cell phones as hardware to process transactions.
Ultimately, Cohen-Shohet’s goal is to build a holistic, all-encompassing business management platform for small business owners in the beauty and wellness space.
“I think the appetite for freedom, flexibility and control among business owners has never been bigger,” Cohen-Shohet said.
GlossGenius triples valuation, raises $25M to give beauty industry’s tech stack a makeover by Anita Ramaswamy originally published on TechCrunch