The subscription box company wants to collect more data to send personalized skincare, supplements and other products.
© 2016 Bloomberg Finance LP
A healthcare entrepreneur with backing from Walgreens, Unilever and Estee Lauder is buying Birchbox for more than $45 million, with plans to revitalize the subscription box company by getting into personalized health and wellness products.
The company will begin asking its 300,000-plus subscribers to share personal health information — collecting data through skin tests, for instance — and using it to zero in on relevant skincare, supplements and other products, like birth control or pregnancy tests.
“We will have gathered information so you don’t have to see thousands of products,” says Kimon Angelides, who has a PhD in bio-organic chemistry and is executive chairman of FemTec Health, the newly-launched company that has acquired Birchbox. “We’ll make suggestions on the things that match your biology and match your life stage.”
It’s a new twist for Birchbox, and will see the departure of cofounder Katia Beauchamp as chief executive. She will sell her remaining interest in the company and become a strategic advisor.
While Birchbox pioneered the subscription box trend when it launched its beauty offering in 2010, spurring a wave of similar offerings in everything from toys and snacks to books, it struggled to find profitable growth. In 2018, it sold a majority stake to Viking, an existing investor, for $15 million. It was a pittance for a company that had raised $90 million from investors like Accel and First Round Capital and was once valued at as much as half a billion dollars. At the time, the company had reportedly approached everyone from QVC to Walmart, trying to find 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,” says Angelides.
In a bid to create a stickier relationship with customers, Birchbox and others are betting on personalization. Stitch Fix, which is the country’s most successful subscription service with 4.1 million active customers, recently opened up its shopping platform to non-subscribers, touting a personalization engine that can quickly help surface styles that shoppers will like. Another company called The Yes, started by former Stitch Fix chief operating officer Julie Bornstein, also offers personalized apparel recommendations for brands like Madewell, Alo Yoga and Valentino.
To power its recommendations, FemTec …….