Ipsy, an online-only makeup subscription service, has raised $100 million in a Series B funding round led by TPG and Sherpa Ventures. Although ipsy has not officially disclosed its valuation, sources told Bloomberg that with the latest round, the company is valued at more than $500 million.
Consumers that subscribe to ipsy pay $10 each month to receive Glam Bag packages that include an assortment of cosmetic samples. Members can tailor their selections and receive discounts when they purchase full-sized goods on the ipsy site. With more than 1.5 million subscribers, the startup will reportedly earn $150 million in revenue by the end of 2015.
YouTube celebrity Michelle Phan and Marcelo Camberos, a former executive at humor web site Funny-or-Die.com, Co-Founded ipsy, which has achieved success partly due to its social media presence, which is fueled by video content. Leveraging more than 10,000 content creators as part of its Open Studios platform, ipsy frequently publishes step-by-step makeup tutorials on its YouTube channel.
“We see consumer preferences shifting dynamically across industries and ipsy embodies this trend for beauty,” said David Trujillo, a partner at TPG. “ipsy has created a platform through which brands can more easily access customers, creators can connect with and expand their audiences, and consumers can discover new products and share these experiences via social media. We look forward to partnering with ipsy’s founders to continue growing their innovative company, most immediately by leveraging our experience with other high growth, disruptive businesses, as well as connecting ipsy into our global network of value add relationships.”
The subscription box model is gaining popularity in the retail space, with companies such as Birchbox and Dollar Shave Club building their brands successfully and Sephora jumping into the model. With Birchbox set to be valued at $750 million and Harry’s, another men’s grooming subscription service, recently valued at approximately the same amount, it’s clear that investors are seeing potential in these companies moving forward.