Birchbox launched in 2010 and in the UK in 2013 and has quickly become the UK’s number one beauty box subscription service.
Last month, the brand announced that they had been acquired by women’s health start-up FemTec Health. According to Forbes, the texas-based firm thought to be worth $380m alone, laid down more than $45m for the beauty box brand.
In recent years, we have seen the increasing popularity of personalised beauty and wellness utilising AI and other clever tech innovations. FemTec plans to revitalise the subscription box and with the departure of cofounder Katie Beauchamp as chief executive, it is a brand new chapter for the company.
What does this mean for Birchbox and will other beauty subscription boxes follow suit?
Birchbox established its pioneering beauty box venture in 2010 with the aim to design an experience that allows customers to try a range of beauty products at home, then buy the ones they love at the Birchbox online shop.
Birchbox led the way to a number of other subscription box services, from beauty to toys and food to books. Despite Birchbox’s initial success as the hot new trend on the market, they struggled to find profitable growth long term. In 2018, it sold a majority stake to Viking, an existing investor, for $15 million and it is said that at this time, the company had approached everyone from Walmart to QVC in search of a buyer.
“I think the problem in the industry was, and I’ve seen it from all the other companies as well . . . is that they weren’t able to create that sort of engagement or relationship. It just became sort of a purchase,” said Kimon Angelides, Executive Chairman of FemTec Health.
In a bid to create a more personalised experience and return to their original mission to form meaningful customer relationships and find individual product matches, the company is turning to personalisation in the hands of FemTec Health, and the future looks bright.
FemTec Health is a health and beauty sciences company using technology and data to transform the total healthcare experience for women. Their process is heavily based around science and data to provide personalised care to every customer.
The platform uses the BiomeAI engine to customize a patient’s journey by using consumer, genetic, microbiome and biometric data.
FemTec was initially established in May 2020 by Kimon Angelides, the founder of seven healthcare companies, including Livongo Health and Vivante Health. Despite gaining more than $38m of investors’ money, it did not launch publicly until last month.
“Our first acquisitions within women’s health and beauty are key to our mission to revolutionize the women’s healthcare and beauty industry. Women deserve a comprehensive, all-encompassing model designed specifically for them. The starting point is to really understand a woman’s healthcare needs, and then apply smart technology like AI and predictive analytics to translate the data into actionable outcomes,” says Angelides.
With the overwhelming size and scope of the beauty and wellness industry, choosing products that are right for you can be difficult. The opportunity to use pioneering science and data to offer entirely personalised and individually sought out product recommendations to consumers is sure to build long-lasting customer relationships.
There is a growing interest in digital health companies focused on women. According to a Rock Health report, from January to August 2021 femtech companies raised $1.3 billion. Despite the growing interest, women’s health still takes up a small percentage of all digital health fundings.
There is a huge lack of research, awareness and representation regarding matters of women’s health and wellness and as a result many women feel lost when it comes to taking control of their wellness routines. Understanding the correct products and treatments has become difficult and according to a recent study, more than 80% of women rely on advice from friends and family due to the lack of knowledge available elsewhere.
“What I hear consistently is that women do not know where to go, or what products to choose that may help. This is where FemTec Health’s unified and coordinated platform comes in. We provide personalized services and science-based products that are meaningful and effective for women at all stages of their lives. I believe the future is female and FemTec Health will help get us there,” says Kim Capone, chief scientific officer at FemTec Health.
To power its personalised recommendations, FemTec is spending $28 million to acquire tech startup Mira AI, which uses data and artificial intelligence to match a consumer’s individual attributes with beauty products and content they may be relevant to them.
In regards to Birchbox, the company will begin by asking its 300,000-plus existing subscribers to answer questions and share personal health information in order to collect data. They will also utilise other methods of testing such as skin tests. They will then use this information to zero in on relevant skincare, supplements and other products. For example, it may take the results of a skin hydration test and recommend a facial lotion that is good for dry skin.
“It’s really exciting to get our hands on the types of information that will help us do our jobs better,” says Jay Hack, cofounder of Mira. “It suddenly means you’re able to reach into that person’s life and have a much more intimate relationship with them.”
Femtec also has plans beyond the Birchbox project. In the new year, they plan to launch a concierge-style telehealth platform called Awesome Woman, helping women navigate pregnancy, menopause and a number of other women’s health-related topics.
For Birchbox, it is a step in the right direction in order to create more meaningful and long-lasting relationships with their customers. It is difficult to say whether other beauty subscription companies will follow in their footsteps, but judging by the ever-growing popularity of personalisation in the over-saturated beauty industry, it is safe to say this is not the last we will see of a move like this.