Dealmaker Summit 2024

June 17-18

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NEW YORK CITY

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June 17-18 | NEW YORK CITY |

The First-Ever Summit Laser-Focused On Beauty Dealmaking

Beauty Independent’s Dealmaker Summit is widely recognized as the premier sector-specific professional event for leaders involved in fund raising, capital strategy and M&A in beauty and wellness.

Renowned for its best-in-class content, The Dealmaker Summit features an expertly crafted agenda focused on topics relevant to beauty and wellness dealmakers, carefully curated panels that provide relevant yet diverse perspectives, and original research and insights presented by Beauty Independent’s Editorial team.

Join a diverse group of the most influential dealmakers active in the space, including strategics, private equity, venture capital, family offices, angel investors, incubators, investment bankers, as well as founders and CEOs of high growth brands for two-days of peer-level thought leadership and networking.

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There’s nothing like this event in the industry today.

“”

— REUBEN CARRANZA
Group CEO, Amika, Ethique, Eva NYC

HEAR FROM PAST ATTENDESS

Summit
Agenda

I.INVESTMENT STRATEGY

A year ago things seemed bleak in the beauty M&A world, forcing many bankers to vacation in one of the lesser Hamptons. Then came news that inflation was cooling, the worst of interest rate hikes was likely behind us, consumer spending remained stable and the much dreamt-about ‘soft landing’ was a genuine possibility in the US. By December, deal flow had come roaring back with a speed and intensity that rivaled the frothy days of early 2021. K18, Dr Dennis Gross, RoC, Barbara Sturm, The Honeypot Co., DS&Durga all traded in a 30 day period.
From hair to skin, body and fragrance, it looked as if beauty dealmaking was back in full force and once again making headlines. But look under the surface, and one begins to see a more nuanced picture. From the types of assets traded to the multiples and exit conditions, things may be better, but definitely more tempered. In this panel we examine the latest rounds of dealmaking and what they portend for the future.
Following an uncertain 2023 in which venture capital investment fell to a 6-year low, beauty M&A activity is set to accelerate as investors and strategics work through their deal pipelines from the past 12 months. While strategic buyers will continue to prioritize profitable, growing companies with differentiation in terms of efficacy and positioning, how will they be shaking up their investment strategy? Are they looking to stick to the core four categories or hoping to step out into the riskier, but perhaps greener pastures of wellness, sex, biotech, and bodycare? Where do the key players see the value whitespace throughout the investment value chain and how has this changed post-pandemic?
A decade ago, professional investment firms focused on early-stage beauty dealmaking were practically non-existent. Now, the space is ripe with firms who see the potential of getting in on the ground level of the next stratospheric success story—see K18. At the same time, rising costs and increased competition seem to have narrowed down strategic options for emerging brands—self-fund until seed, launch DTC, raise, enter Sephora/Ulta/Target, raise more, prove traction in maybe one foreign market, then call your favorite banker and hit “exit”. Is there now a proven playbook for early stage investing in beauty or is it still an art form? And if most VCs are essentially funding the same strategy, then how will they differentiate themselves and what does this mean for brands that don’t fit this playbook?

II.RETAIL & DISTRIBUTION

Rising DTC costs has made brands suddenly realize how much they need retailers. But the retail landscape has been transformed over the past three years. The rocky post-pandemic economic environment caused a large number of retailers to shutter, while others were bought by larger competitors. As a result, far fewer retailers remain who can take a brand from under the radar to reign supreme. In mass, Target and Walmart hold the crown, whereas in prestige Ulta and Sephora hand out the golden tickets. Does a brand need to be in one of these retailers to grow, scale and snag a favorable valuation? Are there other retailers—or retail strategies—that dealmakers can utilize as viable value drivers?
For years Amazon was neglected by beauty companies—big and small—who did not view the platform as a suitable channel for their products, especially in the prestige and luxury end of the market. Oh, how times have changed. Today there is no doubt that the e-commerce giant plays a significant role in the beauty space, across all categories and every price point. Brand leaders no longer ask “why” Amazon, but “when” and “how” to best Amazon. From a value creation standpoint, however, how should investors view and value a brand's Amazon business—is it the gravy on a DTC or omnichannel strategy, or a viable new meat and potatoes of distribution? How should they guide their portfolio companies as to when and how to best utilize and invest on the platform?

III.PRODUCT OPPORTUNITIES

Driven by trends like Mob Wife and the Clean Girl aesthetic, visual mediums like TikTok, as well as new product categories like lip oils, makeup is back in the driver's seat. In 2023, color was prestige’s strongest category performer with sales ticking up to $2.6 billion while mass makeup sales rose 6%. Who are the brands driving growth and investor interest now and what is their secret sauce? And how do you protect against the traditional risks in this sector–such as massive SKU counts and living at the mercy of trends? Founders and investors weigh in on the scalability of these brands, the long term value they do or don’t hold in portfolios and where they see untapped opportunities.
Some categories are perpetually on the verge of popping but never seem to make it onto dealmakers’ dance cards. Bodycare and men’s grooming, in particular, hold much promise, have shown steady growth and are full of innovative entrants that could be poised for the next round of big deals and eventual exits. What’s kept categories like these from being pushed over the line in the past? Do dealmakers feel the tide changing for these groups? Can they produce as much value for stakeholders as the core four–skin, hair, color, and fragrance– categories?
In 2022, Yellow Wood Partners acquired plusOne and Dame and Cake announced multimillion dollar raises within days of each other. Since then, the pleasure space has been quiet—save for Dame scooping up competitor Emojibator—while health-focused startups and the period care category have driven deal flow. As we wait with bated breath to see which of the holy trinity—Maude, Dame & Cake—close a juicy series B or gets acquired, what are the larger deal flow implications of the smaller scale brand-to-brand acquisitions going on in the space? Will the heavy deal flow in period care continue? And, how does the tumultuous retail landscape for the category impact the long-term prospects of the category’s most promising brands?

IV.Market opportunities

Patience is key when it comes to reaching the summit of luxury brand building. From the outside, the product’s glossy branding, high price points and cult status with consumers drive investors wild. But do these brands really command enviable deals after what is the end of a usually a (very) long road? Plus, the commercial environment is changing and many of the ‘force multipliers’ for luxury brands that enabled them to grow and scale–such as traditional PR and department store partnerships–are falling out of favor or no longer able to deliver the same lift. And new “hot” channels, like TikTok and Amazon, are unproven for luxury. Has the long road in luxury just gotten longer and more uncertain? Why should inventors still invest in the luxury beauty space, where should they place their bets and how should they guide their investments?
Promising a sip from the fountain of youth is hardly a new premise in the beauty industry. But consumer interest and investment activity in wellness– and a focus on less superficial benefits– has been growing steadily for years. As science-backed brands across the industry are on the rise, a generation of souped-up wellness offshoots promising biohacks for improved health, better cognitive function and longer lifespans are gaining traction. First, we define what a longevity brand is and determine whether the science actually backs up the claims these brands are making. Next, we determine how investment professionals are sizing up the potential of the category. Is it a gold mine of financial opportunity that will create a real impact in dealmaking or just another buzzword? Finally, we identify the challenges of operating in the space.
Bioengineering methodologies have transcended their conventional healthcare applications in prescription drugs and professionally administered therapies to revolutionize the production of active molecules and complex biologics now being used in aesthetic treatments and beauty formulation. As the boundaries between healthcare and beauty blur, beauty is primed for a makeover. Will consumers seamlessly transition from understanding natural-leaning products and tried and true staples like vitamin C and retinol to embracing lab-manufactured alternatives? While biotech-driven innovations hold immense promise, concerns regarding safety, sustainability, and accessibility abound. As the realms of healthcare and beauty converge, we assess the evolving terrain and weigh the pros and cons of operating in the space.

V.SPECIAL TOPICS

With so many celebrity-backed or -aligned brands on the market, the effectiveness of star power in the beauty industry is more topical than ever. When strategically utilized, it can lead to sunny outcomes – whether through traditional ambassadorships or more proactive executive roles. As investors now face the challenge of identifying the key ingredients for successful modern collaborations, we delve into the evolving intersection of celebrity and beauty, and where individuals like estheticians, makeup artists, and content creators fit with their burgeoning brands. Through examination of past wins and failures, we offer insights into the foundational elements that are more likely to lead to success and look at disparities and the suitability of celebrity endorsements across product sectors, from fragrance to sexual wellness.
Gen Alpha may be the buzziest cohort of consumers, but in reality, each generation drives the industry forward in varying ways. We take a holistic look at what the opportunities are in each generation and the value each of these groups specifically brings to beauty and value creation. We also examine brands that have successfully tapped into these markets and how they did it.
File under, if you know you know (IYKYK, as the kids say). There is always something bubbling up in beauty that has yet to hit the mainstream. For example, Exosomes, nanoparticles that carry messages from one cell to another, have entered aesthetics promising similar or even superior results to PRP with far less headache. Following the sober curious movement, “wellness” for quitters, or antidotes to or replacements for “vice” products are gaining steam. We identify nascent trends that are deemed to dominate in the coming years, carve out their unique challenges and weigh in on where investors should place their bets.