StyleSeat just raised $25 million in Series B funding to help it build scale in the beauty-booking game.
This story first appeared in the July 14, 2015 issue of WWD. Subscribe Today.
The investment round was led by Fosun’s Kinzon Capital with participation from Lightspeed Venture Partners, Cowboy Ventures and Slow Ventures. This brings the company’s total funding to date to nearly $40 million, including a $10.2 million Series A last year as well as $700,000 and $4 million seed rounds in 2011 and 2013.
Already, the four-year-old platform works with 320,000 stylists in 15,000 U.S. cities and has booked more than 30 million appointments. Founder and chief executive officer Melody McCloskey said StyleSeat will have a hand in more than $1 billion worth of appointments this year.
She wants to use the latest cast infusion to really “activate this marketplace.”
StyleSeat books about 1.5 million appointments a month, with the biggest markets — Chicago, Atlanta, Dallas and Houston — all seeing more than $2 million per month in appointment bookings. Mobile bookings make up three quarters of all appointments and nearly a third of appointments are booked within one day of a previous appointment, showing the end users like the free service enough to try it again quickly. Haircuts make up 18 percent of total services booked, and other hair, spa, nail and makeup services are also popular, according to McCloskey.
The company’s been laser focused on becoming the market leader in the beauty-booking space, supporting as many stylists as possible.
“We know that [stylists] have been burned by daily deal sites,” McCloskey said, noting that some services had trouble spurring repeat customers. “We want the opposite. [We want to be] a scalable source for new customers at a cost that’s reasonable and over time helps them build a sustainable business.”
To date, the platform has been able to increase average revenues for stylists by 70 percent over the first 15 months they use StyleSeat. The biggest complaint the company hears from stylists is that they want more customers. To tackle this issue, StyleSeat will soon help connect stylists with more relevant customers for a fee, which would come on top of the roughly $25 to $35 they pay for the basic scheduling tools each month.
The company will also roll out an updated beauty graph for stylists, offering them additional information on beauty trends and data nationwide. And customers will get access to enhanced tools to help create a more personalized experience that markets to them specifically.
“[We’re] becoming smart on the data side [with the] types of services and brands [consumers] are interested in. That allows us to get smarter about what we recommend in the future,” McCloskey said, noting that preferences, location and where a consumer spends money are all essential to connecting clients and talent.
Expanding StyleSeat’s reach by increasing the number of salons on the platform is also a key initiative going forward. While the vast majority of stylists on StyleSeat are independent, McCloskey said booking through salons instead of individual stylists will become a larger portion of business.
Currently, the company’s revenues come from only from fees the stylists pay to be on the platform, but McCloskey said this is likely to change.
The ceo noted the most “sustainable business model” would ultimately include getting a cut for the services rendered by the stylists. StyleSeat started with a lower revenue model to build a bigger base.
“Part of the challenge with other beauty apps is that they are small, in one or two or three cities,” she said. “We wanted to have an app that added value nationwide first so we can monetize from a community of hundreds of thousands.”