Dae Hair has raised an $8 million series A funding. The round was led by Verity Venture Partners (co-founded by Tina Bou-Saba and Matt Levin), an early growth firm which previously invested in Noto Botanics, with participation from Digital Brand Architects (DBA), Whitney Port, Aimee Song and Christine Andrew, and with continued participation of existing investor Willow Growth Partners.
"In an effort to accelerate milestone growth, this strategic raise will provide the resources needed to hire support talent, drive first-in-class advertising campaigns, and deploy lifecycle marketing initiatives that halo around the customer experience, both online and with our exclusive retail partner, Sephora," says Jenny Son, president of Dae.
Between Q1 2021 and Q1 2022, Dae Hair's EMV (earned media value) growth outperformed its competitive set by 81%, per the brand.
Dae’s hair care assortment includes shampoos and conditioners, along with multitasking styling and treatment products.
The prestige hair sector has been red-hot in 2022.
The NPD Group recently reported that prestige hair care posted the fastest growth in U.S. prestige beauty in Q3 2022. Hair care sales totaled $853.8 million for the period, representing 23% year-over-year, a growth rate almost identical to Q2.
Key drivers included products offering restoration and strengthening benefits.
Category sales online and in brick-and-mortar are almost evenly split, per NPD. In addition, the sector has actually reduced the number of units sold on promotion by 2 points.
"Verity Venture Partners is thrilled to partner with Dae on its Series A," says Bou-Saba. "The business reflects everything that we look for as consumer investors–strong category tailwinds, exceptional founder and team, outstanding brand DNA, and excellent business economics."
The executive adds, "Hair care has been a high growth sector in beauty and a major focus for us as investors. Clean, prestige hair care is growing especially rapidly, driven by consumer interest in ingredients and the 'skinification' of hair. Of course, beauty is a crowded space, and we look for brands with the potential to break through and scale. We think that Dae is incredibly well-positioned to be a major winner!"
Bou-Saba continues, "As a founder, Amber [Fillerup Clark] is uniquely qualified to lead and build the business, given her strong credibility in the hair category and unique creative vision. Moreover, she has a highly engaged and loyal community that has given Dae a significant competitive advantage in building its customer base and bringing excitement to retail shelves. In addition, the brand’s desert-inspired positioning is beautiful and differentiated, and the products’ clean ingredients and exquisite scents make for a true self-care experience for the consumer. Lastly, Dae is one of the fastest-growing, most capital-efficient brands that we have seen at this stage in beauty. This speaks to the power of Amber’s connection with her community and excellent execution on the part of Dae’s team."
Global Cosmetic Industry asked Bou-Saba about the current economic uncertainty on beauty investments in general.
The executive explains, "No doubt, we are in a period of high macroeconomic volatility and uncertainty, and investors are much more cautious than they were in the past few years. Generally, we have seen fundraises take longer than they did in the past, and investor selectivity is very high. That said, beauty is relatively recession-resistant, so we worry less about the category than we do most others in the consumer space. (Recent quarterly earnings commentary from the large public retailers supports this–beauty has been a real pocket of strength.) In addition, companies like Dae that have strong business economics have a major advantage in weathering a potential storm, while others may find themselves in a more challenging financial position and unable to invest in growth."
She concludes, "Fundamentally, we believe that the best, most promising brands are simply that, regardless of where we are in the economic cycle. Dae’s powerful connection with its community, outstanding products, exceptional team, and differentiated positioning are what’s ultimately most important."
Son elaborates on the strength of the hair care sector.
"This past year we have seen a movement of the consumer’s interest towards clean hair care–and looking for that clean hair care option within the prestige space specifically," she says. "The category continues to grow year over year and we don’t see that slowing any time soon. Just like what we have seen with skin care, the consumer has become more savvy and is looking for the best in terms of performance and quality."
But what's behind the need for “hair health” solutions among consumers?
Son explains, "We are seeing a similar trend to skin care now show up in the hair space, where the consumer is becoming more savvy and looking for the best ingredients and results based on hair type and concern. She wants her hair care products to be both safe and effective and not have to compromise. The consumer is thinking about the scalp like they think about their skin care routines. At Dae, every product has been intentionally crafted with clean ingredients that are safe and effective and all formulations are loaded with nourishing ingredients derived from desert botanicals that have worked for centuries to revive hair to its healthiest and shiniest."