New start-up incubator Foundry has unveiled its first investment, taking an undisclosed minority stake in online beauty business Lusthaveit.com.au.
The deal represents the first start-up to be backed by Sydney-based Foundry – which is run by former executives of Microsoft, Fairfax and Network Ten – since it launched in November last year.
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Lusthaveit.com.au, which launched in July last year, was founded by Nicci Herrera, who has been working alongside two sales staff and the Foundry team in order to grow the business.
The start-up calls itself “Australia’s first beauty subscription commerce business.” For a $14.95 rolling monthly subscription, or $165 a year, users are regularly sent hand-picked boxes of various cosmetic products.
Lusthaveit.com.au also has a standalone eCommerce arm. Alongside its investment in the business, Foundry has also purchased Glossybox, its leading competitor in Australia.
Dale McCarthy, founder of Foundry, tells StartupSmart that she hopes Lusthaveit.com.au will have a similar impact in Australia that its US equivalent Birchbox has had Stateside.
In August last year, Birchbox raised $10.5 million in series A funding from a group of investors, including Accel Parkers.
“We looked at a lot of businesses before we decided upon this one,” she says. “Nicci doesn’t have a lot of digital experience, but she has 15 years in the beauty industry and has great connections here. We bring the digital expertise.”
“There are so many beauty products released that it’s hard to keep up. Having a curated eCommerce model allows users to save time and have things that are seasonal and suit them.”
“This is a new concept in Australia, so it will be a challenge to educate the market. But the benefit is that it is socially and virally driven. Women are heavily engaged so they will spread the word and build the community.”
“We have several thousand subscribers, but we are at the tip of the iceberg. We hope to grow subscriber numbers, launch into New Zealand and possibly Asia.”