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Beauty Tech
Overview
Beauty tech refers to the intersection between technology and the beauty industry, with a focus on how technology is redefining the development, marketing, and sale of beauty products. This includes a wide range of personal care products, including skincare, hair care, and cosmetics.
Notably, personal care products are no longer one-size-fits-all or loosely tailored to predefined customer segments. Meanwhile, the intersection of beauty and technology is no longer limited to Web 2.0 applications like social networking, influencer marketing, and ecommerce. Instead, every individual makeover has the potential to be powered by gadgets, ranging from AR-based immersive experiences to AI-driven hyper-personalized skincare to IoT-powered smart devices for DIY beauty, and next-gen, lab-grown ingredients.
Industry Updates
Market Sizing
The US Beauty Tech market could reach USD 10.0 billion–14.8 billion by 2028
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Use cases
Technologies such as augmented reality (AR)/virtual reality (VR) and blockchain have reached widespread adoption in the beauty space, predominantly across various consumer staples industries as well as the consumer discretionary and healthcare industries.
Online product recommendations and virtual try-ons using AR/VR technology for personalized skin/hair care product recommendations, makeup, and hair color trials have shown significantly high adoption rates, enhancing customer experience, leading to increased conversion rates and higher basket values. Moreover, the adoption of blockchain technology has gained traction in providing ethical sourcing verification and validating sustainable practices, enhancing brand trust for beauty product manufacturers. Other emerging trends involve the advancement of bio-based materials in alignment with a growing focus on sustainability and the integration of smart devices like nail spas and custom product dispensers to provide a more convenient and personalized experience.
We have identified key beauty tech use cases below:
Market Mapping
AR/VR, AI/ML and next-gen materials tech represent the most prominent segments in the beauty tech space. Incumbents play an active role in the space and include beauty product manufacturers like L’Oréal, Estée Lauder and Coty, beauty retailers like Sephora, consumer goods companies like Unilever and Procter & Gamble, and materials innovation companies like Eastman Chemical Company. Typically, these players work across segments by leveraging acquisitions, partnerships, and investments in startups. The space also consists of notable disruptors like Function of Beauty, Proven Skincare, Nimble Beauty, and Perfect Corp, many of which specialize in one or two segments.
Personalized skincare
Personalized haircare and other beauty products
Curated beauty platforms
Smart beauty devices
Beauty tech solutions
Sustainable beauty ingredients
The Disruptors
Most beauty tech startups focus on a single core segment, including AI-based skincare providers like Function of Beauty, next-gen materials tech players like Bolt Threads, smart device providers like 10Beauty, and blockchain-focused players like Sourcemap. Players increasingly meld two or more technologies to provide differentiated products and experiences. Perfect Corp, the only listed company in the space, offers both AR- and AI-based solutions for the beauty industry, while Nimble Beauty combines AI, machine vision, 3D image processing, and robotics in its automated manicure machine.
By 2024, next-gen materials tech players led the pack in terms of funding, with two players, Bolt Threads and Geltor, collectively accounting for over USD 670 million in funding. Meanwhile, two AI-focused players, Function of Beauty and Ipsy, collectively accounted for over USD 485 million in funding.
Funding History
Competitive Analysis
Incumbents
Partnerships with tech startups help incumbents level up in terms of technology and reach
Incumbents in the beauty industry have a history of acquiring, partnering with, and investing in Beauty Tech startups as a means of broadening their reach and offerings in the space. In March 2018, for instance, L’Oréal acquired ModiFace, a Canadian provider of AR-based makeup VTO and AI skin analysis, to support its digital acceleration strategy for international brands. In December 2023, Unilever announced plans to acquire biotech hair care brand K18, a developer of a novel molecule, K18Peptide, to strengthen its portfolio of high-growth premium brands.
Meanwhile, most incumbent partnerships are focused on collaboratively developing sustainable ingredients, expanding product lines and leveraging third-party AR/VR and AI/ML tech.
Notable Investors
