This startup makes shampoo and conditioner customised to your hair -- and it's valued at $110 million

Function of Beauty is a young startup trying to tackle an age-old problem: getting better hair.

The New York-based startup, which launched last October, lets you create custom shampoos and conditioners based on your hair type and goals. If you want smooth, shiny hair, for instance, you can let the company know and they will build a concoction that fights frizz.

Function of Beauty is less than a year old, but it’s already seen massive success: The company went through Y Combinator, raised a total of $US12 million — including a $US9.5 million Series A in March — and is already generating revenue, according to founder and CEO Zahir Dossa (although Dossa declined to disclose monthly revenue).

Plus, Function of Beauty is valued at a whopping $US110 million, according to a person familiar with the company.

12 billion combinations

The idea for creating bespoke hair products was the result of Dossa’s studies at MIT. While working on his dissertation, which focused on value chain optimization and ecommerce, Dossa began studying different industries.

“I saw that was the most bloated [industry] was beauty, and more interestingly, the value chain for beauty hadn’t really changed over the last 100 years,” Dossa told Business Insider. “There were all these middlemen in the way.”

Dossa decided to build a direct-to-consumer company that focused specifically on hair care. Shampoos and conditioners were the most varied because of different hair types and hair goals, he learned, which meant endless customisation.

Well, not quite endless — Function of Beauty can create 12 billion different combinations of ingredients.

Function of BeautyFunction of BeautyThere are five different colour combinations and four different scents. You can also opt to go dye-free.

Here’s how it works:

  • You start by taking a quiz on Function of Beauty’s website about your hair. By doing this, you’re building your Hair Profile, which the company saves so you can easily reorder more products.
  • You’ll answer questions about your hair type, hair structure, and scalp moisture.
  • Next, you’ll select five “hair goals,” like volumize, deep condition, or lengthen.
  • Then, you’ll pick which colour and scent you’d like the shampoo and conditioner to be, along with the fragrance strength.

After that, Function of Beauty will build your custom formula using its algorithm.

Function of BeautyFunction of BeautyThe shampoo, conditioner, and box can all be personalised with your name.

“If we know what a person’s hair profile is and how they’d like their hair to behave or look or feel, then basically we can combine those two data points to be able to come up with a unique base for each person based on their profile, and then various performance blends that we can add that appeal to each hair goal that they fill out,” Dossa said. “And then they are other various ways to personalise it, like the fragrance or the colour.”

Once the set is delivered to a customer, they can test it out. If it doesn’t work for their hair, they can send it back and a new formula will be created, free of charge.

Function of Beauty also has a subscription service, so you can have new products delivered without having to manually reorder or shop in a store.

Still, the company is considering how traditional retail ties into its future plans.

“The question is, how do we balance our fast online growth, which we’re still struggling to keep up with, with also having a retail presence?” Dossa said. “Originally, [a retail space] was slotted for a summer launch, but we might end up doing an exclusive showroom for our more fervent customers, those who really want to see how their sets are being made.”

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