Terms of the deal were not disclosed, but Beiersdorf said it had become the second-largest shareholder of the Seoul-based concern.
The investment was made through Beiersdorf’s venture fund. The group said the move fits strategically with its C.A.R.E.+ plan to “win in skin care and drive consumer-centricity through digitalization.”
The investment also reinforces Beiersdorf’s presence in South Korea and more broadly in Asia. Lycl is now part of Beiersdorf’s Nivea Accelerator in South Korea.
Many multinational beauty companies are opening and running incubators to get closer to and glean know-how from entrepreneurs, who have been shaking up traditional business models — especially in hot categories such as natural beauty and tech. Among those in Europe to have launched such start-up studios are L’Oréal, Sephora, Puig and L’Occitane Group.
South Korea has been a key launchpad for innovation and trends in the beauty space over the past few years.
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“We see great potential in Lycl’s disruptive business model and its high degree of digital consumer connection,” Dessi Temperley, chief financial officer of Beiersdorf, said in a statement.
Lycl was established in 2013 and combines three business models: unpa.me, a review and content platform for K-beauty products; palett.me, an influencer network platform, and unpa.Cosmetics, Lycl’s skin-care brand.
Through Lycl’s two beauty platforms, it has access to more than 1.2 million consumers. Thanks to their shared insights, the company has put into effect a data-driven innovation process to create and market unpa.Cosmetics products.
Most of Lycl’s products are sold direct-to-consumer in South Korea through its own web site.
“The digital innovation capabilities and strong consumer-centricity of Lycl have resulted in triple-digit growth rates over recent years, and we believe the business model is geographically scalable,” Temperley said.
“The decision to launch the Nivea accelerator in [South] Korea as part of our global venturing activities was made based on the belief that the Korean ecosystem is a frontrunner regarding beauty and tech trends,” said Endrik Hasemann, general manager of Beiersdorf South Korea.
Hamburg, Germany-based Beiersdorf registered sales of 7.2 billion euros in 2018. Its brand portfolio includes Nivea, billed to be the world’s largest skin-care brand; La Prairie; Eucerin and Hansaplast/Elastoplast.
Beiersdorf’s announcement comes less than a week after L’Occitane Group’s start-up incubator Obratori said it had taken a minority stake in Le Rouge Français, an organic and vegan lipstick brand.