Beauty sampling startup bellabox has just been acquired by Fairfax subsidiary Allure Media in a deal which values the company at about $12 million.
bellabox has sold off a significant stake to Allure in a deal understood to be worth $6 million.
(Disclosure: Allure Media is also Business Insider’s publishing company.)
More than $3 million of the new investment will be reinvested back into bellabox with the remainder paid out to some existing shareholders.
The cosmetics sampling distributor was founded in October 2011 by twin sisters Emily and Sarah Hamilton after the two became fed up with crowded malls but loved online shopping. The subscription-based service allows members to discover, trial and buy beauty products.
After achieving compound monthly growth of 12% since launch, the numbers mind of the pair, Sarah Hamilton, told Business Insider they approached Fairfax when looking for funding a few months ago. She says they don’t count the investment as an exit, but rather a transition to having “a smaller slice of a larger pie”.
“The media world in general was really attractive for us when looking for this partner,” Hamilton said, adding the investment would be used to broaden the product offering, expand into new regions and invest in new technology.
The Hamilton sisters have managed to grow a diverse user base which enables them to target the specific groups their brand partners wish to hit.
“We have a really wide range of members and really then our growth has been dictated by targeting those different membership groups,” she said.
“There’s ridiculous amount of box variations which go out on a monthly basis.”
When members join they fill out a profile which includes all the standard demographic information but also includes details about their beauty regimes and lifestyle choices. Having access to such in-depth information is proving valuable to both advertisers and investors.
“The data is huge and we’ve just touched the surface in terms of how we utilise that data,” Hamilton said.
The strategy behind the acquisition has got a lot to do with how media companies will look like in the years ahead and how revenues will be expanded in the face of declining traditional advertising spends.
Digital advertisers are increasingly shying away from display advertising in favour of creating a meaningful connection with a targeted user. Enter content marketing, community building hacks and experiential campaigns.
Allure Media CEO Jason Scott said, “There are many synergies between the two companies from the markets we operate in, to the audiences we attract. In combination, we offer the brands we work with a truly unique set of capabilities and expertise.”
Joining investors from Square Peg Capital, Elevation Capital and Yes to Carrots, Scott and Fairfax Digital Ventures group director Guy Reypert will both take seats on the bellabox board.
**Allure Media is a wholly-owned Fairfax subsidiary which publishes a range of titles in Australia including Business Insider Australia, Lifehacker, Gizmodo and POPSUGAR.**