Accelerators, described as short-term brand boot camps, aim to grow brands as quickly and successfully as possible through mentor-driven support. It’s a win-win scenario involving collaboration and cross-pollination. Companies often take a small equity stake in the startup and offer small seed funding – and benefit from the startup’s innovation and often disruptive mindset.
And the beauty industry has its foot on the innovation gas pedal.
Nearly every beauty company has launched an accelerator in recent years to drive innovation, foster promising startups and help launch new brands in an age of heightened competition and reduced barriers to entry.
In early April, LVMH announced the creation of an accelerator program, La Maison des Startups, at Station F, the world’s largest startup campus in Paris. (Other startup programs on the campus include Facebook and Microsoft). The initiative will drive acceleration between the conglomerate and startups to invent innovative new products and services for the luxury market, aligning the needs of LVMH’s brands with 50 international startups selected annually.
“Innovation isn’t just a buzzword at LVMH, it’s a practical obsession, crucial to maintaining our leadership position long-term. Collaborating with startups helps us stay abreast of both business opportunities and ways of working. A healthy startup ecosystem is necessary for a healthy industry,” said Ian Rogers, Chief Digital Officer at LVMH.
In addition to an inspiring working environment, the multi-sector program offers personalized coaching and support from the LVMH group.
LVMH joins a slew of other companies that have recently launched accelerator programs.
L’Oréal, for one, invested in London-based, global digital accelerator Founders Factory in 2016. The French beauty firm also announced a partnership with Station F to run a global beauty accelerator in 2017.
Through its strategic investment in Founders Factory, L’Oréal selects five high potential early-stage startups each year for its accelerator program, offering mentorship in several areas including scaling, testing of products, and fundraising. L’Oréal’s beauty accelerator in partnership with Station F welcomes up to 20 early-stage startups in three main fields: indie beauty brands that have unique product innovations, technology startups that have specific capabilities including in augmented reality and artificial intelligence, and early-stage companies that are focused on digital services such as diagnostic tools, product personalization and customization.
And, there are so many others:
- Sephora Accelerate, Sephora’s program to support female founders, announced last summer that it would be opening up its program outside the US. The program, launched in 2016, comprises a one-week boot camp where founders work on their business model, receive one-on-one mentoring from industry leaders, as well as grants and possibly additional funding.
- San Francisco-based Kendo, whose portfolio includes Fenty Beauty and Kat Von D Beauty, describes itself as an “innovative brand incubator” that creates and acquires emerging beauty brands.
- Coty followed the launch of its Digital Accelerator in 2017 with a new program for technology startups to share their innovations at the company’s Quarterly Digital Accelerator Summit. The program focuses on a series of capabilities, the first of which is artificial intelligence. Startups demonstrate how a specific Coty brand will benefit from their AI technology, with the chance to win up to $100,000, in addition to benefiting from strategic support from Coty’s digital team, and have access to Coty brand executives worldwide.
- AmorePacific’s APTechUp+ was launched by AmorePacific and FuturePlay, a specialized incubator program aimed at enhancing digital age competitiveness and fostering promising beauty startups. APTechUp+ gives startups the opportunity to gain financial and operating independence, while the accelerator determines which will receive a second round of investment and the opportunity to participate in strategic tie-ups with AmorePacific.
- Shiseido Venture Partners’ stated mission is open innovation.
- Unilever Ventures invests in and accelerates the growth of young startups.
- P&G’s Connect + Develop, an early forerunner, links innovators to P&G’s needs.
- Target Takeoff is the mass merchandiser’s consumer product startup accelerator. This year, Target Takeoff is looking for 10 emerging beauty brands with less than $10 million in revenue that focused on naturals, multicultural, men’s and indie beauty. The five-week accelerator program offers guidance on scaling and launching products for large markets, mentorship from Target teams, and the opportunity to share their products during a showcase event.
Beauty accelerators are moving innovation into the fast lane, enabling startups to do more, faster, to help bring their products and services to market, and scale their businesses, at unprecedented speed. While companies still seek to acquire dynamic indie brands, accelerator programs provide an alternative to costly acquisitions further down the line by fostering win-win partnerships at the seed stage.