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General Atlantic, the growth equity firm behind Morphe, has set its sights on clean beauty.
The firm has acquired a minority stake in Vegamour, the clean hair care brand centered around hair growth, for $80 million. Vegamour offers hair growth products for scalp, lashes and eyebrows. The offerings are vegan, cruelty-free and free of parabens, toxins, and phthalates, among other ingredients purported to be potentially harmful.
The ideal brand partner had to have clean ingredients, said Andrew Ferrer, managing director of General Atlantic. “Vegamour delivers hair wellness in a way that the consumer can see, especially when they use the product consistently. It also does it in a way that delivers in terms of having clean ingredients, which for many consumers, is just table stakes,” he said.
Ferrer sees consumers battling hair loss as a largely untapped market. “Hair loss is a problem that affects roughly 35 percent of women, which is tens of millions of women in the U.S. alone and more globally,” he said. “It is a big market opportunity.
“This brand in particular really jumped out to us based on our work, talking to consumers across surveys and focus groups, and what jumped out was this product really works for them,” Ferrer added.
Industry sources say the brand could track between 300 and 400 percent growth year-over-year from 2020, which was already a 750 percent increase from 2019. Sources added that Vegamour could reach the billion-dollar mark in annual sales with the help of the investment.
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The brand’s boom in business was partially due to the coronavirus pandemic, which accelerated hair loss for many consumers. Daniel Hodgdon, Vegamour’s founder and chief executive officer, thinks the investment will help scale operations to meet consumer demand.
“At Vegamour, it’s our mission to reset and redefine what hair care actually is today. This relationship with General Atlantic enables us to broadcast that message and share that message in a much louder, deeper voice on a global scale,” Hodgdon said.
Taking the brand global is part of General Atlantic’s growth strategy for Vegamour. “There are geographic expansion opportunities, and as a global firm, General Atlantic is always looking to help brands think about opportunities in other geographies. This brand will be able to scale globally, over time, and through that, we will consider other channels beyond just the direct-to-consumer channel. But for right now, d-to-c has proven to be a very effective way for this brand to find the consumer that wants this product, and to deliver to that consumer,” Ferrer said.
For now, General Atlantic sees the business growth happening organically without any add-on acquisitions. “This brand has a huge opportunity, and our focus for the foreseeable future is to partner with Dan and his team to scale this brand,” Ferrer said.
Financo advised Vegamour on the deal.
For more from WWD.com, see:
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With General Atlantic Investment, Morphe Plans to Buy More Brands
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