Summit Partners Acquires Minority Stake in Hairstory
Hairstory, the detergent-free hair care brand, has received a minority investment.
Growth equity firm Summit Partners has acquired a stake in the brand. Financial terms of the deal were not disclosed, although industry sources said the investment reached an estimated $30 million.
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Hairstory’s products are sold on a commission basis from partnering hairdressers, as well as directly through its website. Eli Halliwell, the brand’s chairman and chief executive officer, credits the business model for its growth. Although Halliwell didn’t comment on sales, sources said the brand was expected to reach $30 million in revenues in 2021.
Scaling the business effectively is Halliwell’s first order of business with the recent investment. “One of the biggest challenges we’ve had is that we were essentially bootstrapped and self-funded, and whenever we hit on something that was really powerful, I had to hit the brakes constantly because we’d be running out of inventory,” he said. “We’re going to use the capital to build sufficient inventory to go after every opportunity to the fullest extent.”
Hairstory’s brand message, of sustainably minded products that improve hair health with detergent-free formulas, also resonated with investors.
“We believe Hairstory’s differentiated and effective products, customer loyalty, profitability and consistently smart and deliberate growth decisions make them a rare brand,” Melanie Whelan, managing director of Summit Partners, said in a statement. “We are delighted to partner with Eli and this passionate team to support the company’s next chapter: working to deploy a more expansive growth strategy while furthering sustainability-focused product innovation.”
Halliwell attributes the brand’s high retention rates to the products themselves, which eschew detergents to mitigate the effects of over-cleansing hair. “When you switch from our hero product, New Wash, back to shampoo, you lose the benefits. So we have incredibly high retention rates, and that’s what’s driven our ability to be profitable,” he said.
Brand awareness remains one of the brand’s challenges, and is another target for the recent investment. “We’re still going to be very disciplined, but we’re going to push much more aggressively on awareness, and helping people understand that shampoo is a problem.”
Sustainability is important to Hairstory, which aims to be the first fully refillable brand. It also has a refill program, which it says allows customers to use 90 percent less plastic and produce 80 percent fewer carbon dioxide emissions while cleansing. Its New Wash, a bestseller, is also biodegradable.
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