The Memo | Curlmix Investment Opportunity
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Today, we’re discussing an equity crowdfunding investment opportunity in Curlmix, which is currently fundraising on Wefunder!
Summary
This investment memo for CurlMix on Wefunder provides a comprehensive overview of CurlMix's positioning in the beauty and personal care sector, emphasizing its focus on clean beauty products for curly hair. We’ve detailed the company's evolution, market opportunities, financials, and strategic initiatives. The memo highlights CurlMix's significant market presence, and its innovative product range. In the financial section we outline the company's challenges and resilience, while the investment details outline the offering for potential investors. The memo encourages consideration of market trends, company differentiation, and future growth potential, aiming to inform investors about the promising prospects of investing in CurlMix within the expanding natural hair care market. We hope you find this memo useful as you do your own research on the company.
Disclaimer
The information provided by Bison Venture Partners is intended solely for educational and informational purposes, not as specific investment advice. Investing involves significant risk, including possible loss of principal. Investors are responsible for their due diligence and investment decisions. Past performance does not predict future results. Bison Venture Partners is not a registered investment advisor or broker-dealer. Individuals should consult professional advisors before making investment decisions. Accessing this information implies agreement to these terms, releasing Bison Venture Partners from liability related to investment outcomes.
Full Investment Memo | Curlmix on Wefunder
Overview: CurlMix, a burgeoning presence in the beauty and personal care sector, specializes in clean beauty products, primarily catering to curly hair demographics. Founded by Kimberly and Timothy Lewis, CurlMix has evolved from DIY kits to a comprehensive range of hair care solutions, embodying clean, natural ingredients and sustainable practices. Their recent accolade includes debuting in Ulta Beauty, signaling significant market penetration and brand visibility.
Key Definitions:
These terms are essential for understanding the investment landscape and the specifics of the CurlMix opportunity.
Clean Beauty Products: Refers to beauty items made without ingredients shown or suspected to harm human health. Emphasis is on natural, organic ingredients and often eco-friendly practices.
Pre-Money Valuation: The value of a company before external financing or the latest round of funding is added to its balance sheet. It's crucial for determining the equity stake a new investor will receive.
Minimum Investment: The smallest amount of money that an investor can contribute in a specific investment opportunity. It makes investments accessible to a wider range of investors by setting a lower financial threshold.
Direct-to-Consumer (D2C): A business model where companies sell directly to consumers, bypassing traditional retailers or intermediaries. This approach often allows for better margins and closer customer relationships.
Market Presence: The extent to which a brand is recognized in its target markets. This can include both online and physical retail distribution.
Wefunder: A crowdfunding platform that allows people to invest in startups and small businesses. It democratizes investment, allowing non-traditional investors to fund new ventures.
Key Details:
Company Name: CurlMix
Industry: Beauty and Personal Care
Founders: Kimberly and Timothy Lewis
Launch Year: 2015
Headquarters: Chicago, IL, USA
Product Range: Specializes in clean beauty products for curly hair, including wash + gos, conditioners, and moisturizers.
Market Presence: Products available online and in Ulta Beauty stores nationwide.
Investment Platform: Wefunder
Pre-Money Valuation: $38.4M
Minimum Investment: $250
Campaign Highlights:
Ulta Beauty's Newest Brand: Demonstrates market acceptance and potential for scale.
Over $32M in Lifetime Sales: Reflects strong product-market fit and brand loyalty.
Innovative Clean Beauty Products: Focus on natural, sustainable hair care solutions.
Experienced Founders: Kimberly and Timothy Lewis bring expertise and vision.
Strategic Retail Partnerships: Expands market reach and brand visibility.
Community-Driven Brand: Deep engagement with a passionate consumer base.
These highlights underscore CurlMix's solid foundation, growth potential, and commitment to clean beauty, making it a compelling opportunity for investors looking to participate in the expanding natural hair care market.
Market Opportunity
The natural hair care products market is poised for significant growth, driven by increasing consumer demand for organic and natural ingredients. The global natural hair care products market is forecasted to grow at a CAGR of 6.51% from 2023 to 2028, with market size expanding from USD 10.97 billion in 2023 to USD 15.04 billion by 2028. This growth is fueled by a shift towards products that are perceived as safer and healthier for hair care routines, underlined by a rising awareness of the adverse effects of synthetic ingredients and a strong preference for organic alternatives.
In particular, the demand for organic hair oils, known for their natural benefits such as scalp nourishment and hair growth stimulation, is expected to outpace that of other product segments like shampoos and conditioners. This trend is complemented by the convenience of online shopping, which is becoming increasingly popular for purchasing natural hair care products. The online stores segment, in particular, is forecasted to register the fastest growth within the market, thanks to the broad selection of products available and the added benefits of convenience, accessibility, and often, competitive pricing.
The North American and European markets are key players in the natural hair care sector, with North America holding a considerable share and Europe identified as experiencing robust growth due to the high demand for natural and organic products. This growth is largely attributed to stringent regulations governing the use of chemicals in products and a marked consumer preference for herbal and natural solutions over synthetic alternatives.
This burgeoning market presents a fertile ground for CurlMix, with its commitment to clean beauty and natural hair care solutions, to further entrench its position and capitalize on the expanding consumer base looking for sustainable and healthy hair care options. CurlMix's alignment with these market trends, coupled with strategic retail partnerships and a strong online presence, positions it advantageously to harness the growth potential within the clean beauty and natural hair care market.
Product Range
Pros: CurlMix's specialization in clean beauty products for curly hair addresses a specific and underserved market segment, ensuring product relevance and customer loyalty. Their range of products, from wash + gos to moisturizers, meets comprehensive hair care needs.
Cons: Specialization limits market reach to primarily curly hair consumers, potentially excluding broader market segments. The clean beauty niche, while growing, also faces intense competition from both established and emerging brands.
Market Presence
Pros: Availability in Ulta Beauty stores nationwide significantly boosts brand visibility and accessibility, enhancing consumer trust and expanding market reach.
Cons: Dependence on a major retailer like Ulta Beauty could pose risks if the partnership were to change or if market dynamics shift, affecting retail strategies.
Business Model and Growth: CurlMix operates with a direct-to-consumer model, augmented by strategic retail partnerships, notably with Ulta Beauty. Their focus on in-house manufacturing and control over the supply chain enhances margins and agility in product innovation. Financially, CurlMix has shown impressive traction, with over $32M in lifetime sales, indicative of strong market demand and effective operational execution.
Financials
The financial overview of Listener Brands Inc., the parent company of CurlMix, for the years ended December 31, 2022, and 2021, highlights several critical financial metrics. In 2022, the company reported significant net losses and operational challenges, with a net loss of $4,569,819, worsening from a $3,109,747 net loss in 2021. The operating cash flow loss for 2022 was $3,437,982.
Despite these challenges, the company showed resilience with cash and cash equivalents standing at $224,868 by the end of 2022. Listener Brands Inc.'s situation underscores the typical challenges of scaling operations, including substantial net losses and cash flow issues, yet it also showcases the potential for future growth through strategic initiatives and market positioning.
Valuation and Investment Terms: CurlMix is seeking investment at a $38.4M pre-money valuation on Wefunder. The terms highlight an opportunity for investors to participate in a company with a proven track record, strong brand identity, and significant market potential.
Pros: A high valuation reflects confidence in the company’s growth potential and market position, indicating strong foundational metrics and future revenue expectations.
Cons: High valuations set high expectations for future performance, which could pose a risk if the company does not meet growth projections, affecting investor returns.
Minimum Investment: $250
Pros: Low barrier to entry allows a broader investor base to participate, increasing capital raising potential and community involvement.
Cons: Smaller individual investment amounts may dilute equity and influence, potentially leading to a large and unwieldy investor base.
Investment Platform: Wefunder
Pros: Wefunder provides a democratic investment platform that allows a wide range of investors to participate, potentially increasing capital influx and community engagement.
Cons: Crowdfunding platforms may involve higher risk and variability in investment returns, and investors might have limited control compared to traditional investment vehicles.
Risk Assessment: The investment carries inherent risks, including market competition, scale-up execution, and consumer trend shifts. However, CurlMix's established brand, operational model, and strategic retail partnerships mitigate these risks, presenting a compelling opportunity for growth-oriented investors.
Questions to Consider Before Investing in CurlMix:
Market Saturation: How does CurlMix differentiate itself in the crowded beauty and haircare market?
Growth Sustainability: Can CurlMix maintain its growth trajectory as it scales operations and expands product lines?
Consumer Trends: How adaptable is CurlMix to changing consumer preferences within the clean beauty sector?
Retail Partnerships: What is the strategic plan for leveraging and expanding retail partnerships beyond Ulta Beauty?
Operational Resilience: How prepared is CurlMix to manage supply chain risks and maintain product quality as it grows?
Financial Health: What are the projections for profitability and how does CurlMix plan to manage its capital and investments for long-term success?
These considerations will help investors gauge the potential risks and rewards associated with investing in CurlMix, allowing for a more informed decision-making process.
Conclusion: CurlMix represents an attractive investment opportunity in the growing clean beauty and natural hair care market. Its successful track record, innovative product line, and strategic market positioning make it a promising venture for investors seeking exposure to the beauty industry's clean and natural segment.
Investors looking for growth potential in sustainable and ethical brands may find CurlMix an attractive option, albeit with considerations for market challenges and investment risks. Remember to do your own due diligence!
Thanks for reading,
Garry Johnson III
Founder & Managing Partner
This is fantastic, Garry! The mission of Curlmix is dead on and opens up to a huge market opportunity that has been underserved and underrepresented for so long!