Shiseido Sets Venture Fund, Invests in Phyla, Patricks Men’s Grooming – WWD

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LONDONShiseido is looking to take a bigger slice of the beauty and wellness market with the formation of a venture fund and the acquisition of two small, fast-growing brands: Phi Therapeutics, Inc., and Patrick Kidd Holdings Pty Ltd.

Shiseido said the fund, Long Term Investments for the Future Ventures, or LIFT, will be a vehicle for investing in innovative, early-stage companies in the beauty and wellness space.

LIFT Ventures will be led by Ron Gee, Shiseido Americas’ president and chief executive officer, and will be located in New York City.

Shiseido said the fund “aligns with Shiseido’s goal of becoming a personal beauty wellness company. The fund will primarily focus on compelling innovation in the Western hemisphere, while maintaining a global lens.”

Its aim is to put money behind “novel technologies, innovative platforms, high-growth brands, and new business models, among others.”

As reported, Shiseido is aiming to position itself as a “personal beauty wellness company” by the year 2030. In order to achieve this, the company has also been reinforcing its skin beauty brands, and making steps to move into the “inner beauty” business.

The company said that with recent changes in global environmental and social issues, seeking mental and physical well-being has become more important to more consumers.

The brand known as Phyla is a San Francisco-based pioneer in bacteriophage technology, while Patricks is a high-end men’s grooming company from Sydney, Australia, which currently has a Christmas window at Bloomingdale’s in New York.

Phyla was founded by Yug Varma, PhD, while Patricks is the brainchild of the husband-and-wife couple Patrick and Aimee Kidd.

Patricks is unusual in that it plays in the very high end of the male grooming market. Its Ultra Thickening Anti-Hair Loss Shampoo costs 136 pounds, while its Anti-Aging Moisturizer has a price tag of 88 pounds.

It sells at retailers including Harrods, Mr Porter, Selfridges, Nordstrom and Bloomingdale’s. The brand began as a Sydney barber shop that focused on high-quality service. According to the founders, it launched the performance products in a bid to fill a gap in the market.

Lempriere Wells, which specializes in global, mid-market M&A for high-growth consumer brands in the health and wellness, beauty, personal care and skin care sectors, worked on the Patricks deal with Shiseido.

“Since Shiseido’s founding in 1872, innovation has served as a foundational pillar of our company and a critical component of our future,” said Masahiko Uotani, chairman and chief executive office of Shiseido.

“The creation of LIFT Ventures represents a new opportunity to partner with organizations focused on creating pioneering beauty wellness solutions, and to gain further insights and access for Shiseido’s growth ambitions,” said Uotani, adding the new company presents a welcome opportunity “to build knowledge, create value and, ultimately, achieve meaningful progress for all.”

Gee said the formation of the new investment company “accelerates Shiseido’s continued focus on innovation and represents a natural extension of our commitment to enable the future of beauty and wellness.”

“Supporting, mentoring, and empowering new businesses is an important component of our future roadmap. We are excited to share our unique perspective, exercise our extensive experience, forging strategic partnerships and helping like-minded entrepreneurs scale and achieve long-term growth,” Gee added.

Shiseido’s move is part of a trend for beauty companies – and investors – to find, and invest in, small independent brands with specialist knowledge and niche appeal.

The wellness space is getting hotter by the day, with investors eager to back brands that speak to specific communities, and offer solutions for the enhancement of mind, body and spirit.

Unilever Ventures, Iris Ventures, Kering and Puig are among the many investors taking risks on smaller – as well as more established – brands so they can learn, and leverage their own expertise to build the companies and gain market share.

Last month, Iris, a growth equity fund targeting European and U.S. purpose-led, consumer-centric brands and tech-enabled solutions, invested 5.5 million pounds in Biomel, a market-leading, plant-based gut health brand.

Unilever, which has also been active in the investment space through its venture capital division, said revenue at brands including Liquid I.V., an electrolyte powder that claims to help people rehydrate faster than water, and Olly gummy vitamins and supplements, were outstripping expectations.

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