Kate Morris is selling 60% of Adore Beauty to Quadrant Private Equity after a year-long search for the perfect commercial partner.
Signing on the dotted line just last Friday, Morris tells SmartCompany the deal’s been in the works since March but the idea started growing last October. Starting next month, Quadrant is set to become the majority owner of the award-winning beauty brand.
“We [my husband James and I] bought all these shares back at the end of 2016, and went back to being independent for a while, and had another baby, and we just had to run our own race for a little while there.
“But when you’re a really fast-growing company and you see that opportunity, to do it all self-funded can be pretty challenging,” she explains.
Thanks to the continued success of Adore Beauty, Morris wasn’t short of options when she decided to take on a partner. With several opportunities on the horizon and offers coming in, the question was finding the right fit.
Keeping the momentum
Adore Beauty started 20 years ago in a garage, and it’s been growing year-on-year in revenue and online following ever since. It also has a five-year winning streak in the Deloitte Tech Fast 50.
So why sell a majority take now?
In one word: opportunity.
“We didn’t want to leave opportunities on the table just because we didn’t have quite enough cash, so I think it just kind of made sense,” Morris explains.
“I never like that feeling of ‘oh, maybe we could be going a bit faster’.
“If we could invest a bit quicker, when we’re getting more and more customers and those customers are spending more and more with us, it kind of makes sense to invest a bit ahead of the curve.
“It’s time to crystallise a bit of the value that we created,” she says.
Some of the opportunities were already on the roll before Quadrant jumped on board. Most recently in July, Adore Beauty launched in New Zealand where already, Morris claims, they’ve been “embraced”.
Spurred on by such a quick market response, Morris is keen to use the extra funding to help with resourcing and putting “the foot to the floor”.
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Months in the making
Morris is also eager to keep the momentum of their “rapid growth curve” going with other projects that require time and creativity.
She took a step back from being chief in January last year, taking on the role of executive director instead.
For the last 18 months, she says she’s been busy raising capital, preparing the New Zealand launch, and starting a podcast.
Said podcast Beauty IQ debuted at number one on the Apple Podcast charts.
“Being able to do things like that is really fun,” she laughs.
“I’m certainly not bored.”
Choosing the right partner
Because of Adore’s international success, Morris’ focus was on filtering, rather than sourcing, offers.
It took several months to decide what kind of funding would suit the business’ vision best. All the while, different investors approached and discussed a range of options.
Aligning business goals was one thing, but in the end, values won out.
“They really understood and valued the culture that we’ve built … In the end, it was the obvious choice.
“This was the one that made the most sense for the business and for my family.”