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After a decade of ups and downs, Birchbox is sold. Here’s what we learned

The stuff in the box is just the start.

After a decade of ups and downs, Birchbox is sold. Here’s what we learned
[Photo: courtesy Birchbox]

For a decade, we’ve known Birchbox as a beauty brand that delivers samples in pretty boxes. But its recent $45 million acquisition by FemTec Health, a new female-focused startup, marks a major turning point for the company.

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Birchbox cofounder Katia Beauchamp will leave her post as CEO and sell her remaining stake in the business to become a strategic advisor. FemTec plans to relaunch Birchbox as a product-discovery service that goes beyond beauty, expanding into personal care and wellness. Birchbox’s journey over the last 10 years mirrors the shifting beauty landscape—but also reveals some inherent pitfalls in the subscription model.

[Photo: courtesy Birchbox]
Birchbox launched in 2010 as a monthly subscription box that gave women (and eventually men) a curated selection of beauty samples. The boxes solved a specific problem: In a world where people were increasingly shopping online, Birchbox allowed consumers to sample beauty products at home, much like they would at a department-store beauty counter. When they found products they liked, they could buy full-sized versions on its marketplace. The concept quickly took off, allowing Birchbox to raise nearly $100 million in VC funding over the next decade. Birchbox also inspired hundreds of other copycat subscription boxes for everything from sex toys to socks.

But the acquisition price for Birchbox, which was once valued at nearly half a billion dollars, is less than half of the funding it took on.

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Lauren Bitar, head of insights at the analytics firm RetailNext, said Birchbox struggled to find a business model that really worked. She points out that the goal of the subscription was to help consumers find products they liked. But once this happened, they didn’t need the subscription box any longer. And since they could purchase these products anywhere, they didn’t need to stick with Birchbox.

“It’s a difficult model to keep up long-term,” she says. “Customers would eventually feel inundated with new products.”

Beauty subscription boxes were easy to copy, quickly leading to fierce competition in the market. Ipsy offered monthly samples, but it also leveraged an army of beauty influencers on social media to keep consumers connected to the brand, and now has 3 million subscribers. And bigger beauty retailers like Sephora and Ulta also launched boxes that were virtually identical to Birchbox, which reportedly has around 300,000 subscribers.

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Bitar says that while the subscription model alone is not enough to keep a brand afloat, companies that have combined subscription commerce with technology or content have fared better. FabFitFun, for instance, a quarterly box that delivers a selection of lifestyle products along with a magazine and digital content, has generated 2 million active subscribers. Stitch Fix, which sends monthly or quarterly boxes, has 4.2 million.

“Stitch Fix is effectively a data-science company that has managed to curate clothes that its customers really like,” Bitar says. “They also meet the needs of people in the middle of the country who don’t have access to some of these brands. The subscription model can work, but it can’t be the core selling point.”

Birchbox eventually moved into retail, launching its own stores that focused on sampling and curating beauty products. In 2018, it sold a minority stake of the business to Walgreens, and partnered with the drugstore to launch Birchbox branded in-store experiences. When Birchbox launched, it was relatively inexpensive to acquire customers online. But the cost to acquire customers became steeper as more players entered the market, so it made sense, Beauchamp said, to open stores that would immerse new customers in the world of the brand and generate revenue. However, the pandemic threw a wrench into retail expansions.

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The greatest value Birchbox offers FemTec is likely its customers and email database, since Birchbox has built strong brand recognition in the marketplace and FemTec is a brand-new player. “If FemTec wants to create consumer products, having a trusted brand name like Birchbox will be a huge asset,” Bitar says. “Birchbox spent a decade on branding, and this might well be worth the acquisition price to FemTec.”

Birchbox’s new chapter

FemTec was founded in 2020 by Kimon Angelides, a doctor who wanted to improve women’s healthcare with the help of technology like AI and genomics. It raised $38 million in funding from companies like Walgreens and Unilever Ventures at a valuation of $380 million. FemTec launched publicly in October 2021, and expects to serve women across many dimensions. It will launch Awesome Woman, a telehealth platform to help women navigate complex healthcare issues, from pregnancy to menopause, and sell a direct-to-consumer supplement brand.

FemTec will also offer beauty products and services. “The idea is to bring healthcare into the beauty sector and vice versa,” says Kim Capone, chief scientific officer, who came to the brand from Johnson & Johnson, where she worked on microbiome products. “We’re creating a digital home for women where they can find access to telemedicine, Rx, supplements, probiotics, and through Birchbox we will bring beauty into the fore.” In addition to Birchbox, FemTec has acquired Mira Beauty, a tech startup that uses AI to match consumers with beauty products, for $28 million.

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[Image: courtesy Birchbox]
Beauchamp says she has been thinking about the intersection of beauty and wellness for some time, as the two industries have increasingly overlapped. Some beauty brands now sell supplements designed to improve skin and hair, and the clean-beauty movement has shined a light on the ingredients in products.

Birchbox will continue to exist as a separate brand under the FemTec umbrella, and Beauchamp says some of its customers may not even realize it has been acquired. But the two brands will partner on products.

[Photo: courtesy Birchbox]
To get a sense of how the brands will collaborate and weave together beauty, wellness, and technology, they shared details about their first three boxes. This week, they released a $129 Birchbox Meets Awesome Woman kit, which will be delivered in three Birchbox-style boxes. The first box will contain a skin-test tool commonly used in medical trials to help customers identify their skin type. Then, after they input data about their skin, they will receive two more boxes that contain products curated by Birchbox, along with supplements from Awesome Woman tailored to their skin.

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This kit won’t replace the monthly Birchbox, but it will be marketed to Birchbox’s subscribers, as well as through Awesome Woman. Beauchamp says it’s just the tip of the iceberg, and there will be more high-tech health and beauty experiences to come.

In the end, FemTec may well be Birchbox’s final evolution. For Beauchamp, the past 11 years have been a rollercoaster ride. “I went into Birchbox expecting, as all entrepreneurs do, that building it would be very hard,” she says. “But I could not have imagined all the different things that you would have to learn about to be a company that has staying power.”

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About the author

Elizabeth Segran, Ph.D., is a senior staff writer at Fast Company. She lives in Cambridge, Massachusetts

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