After a mere 18 months in existence, eCommerce startup BeautyKind is heading toward an initial public offering.
The eTail brand specializes in high-end cosmetics and is reportedly looking to raise $10 million with the IPO, according to reports in Internet Retailer.
Launched in November 2014, BeautyKind was in beta for the first 5 or so months of its life, and has actually been out in the open and available to all since March of last year. All in, the firm is looking to sell up to 1.6 million shares for a fixed price of $6.25 per share.
The move comes as a Regulation A+ Offering — a program recently revised by Title IV of the JOBS Act to allow smaller firms and startups to pursue “mini-IPOs” for sums under $50. Regulation A+ investors do not need to be accredited (make $200 a year and have $1 million in household assets) — though there are limits to how much an individual can invest (only 10 percent of their net worth or annual income).
BeautyKind founder Hil Davis is also the co-founder of menswear retailer J. Hilburn Inc. He claims his firm has generated $1 million in Web sales in 2015 and is on pace for $5 million in sales this year. He believes the early IPO will give a change to allow his customers to become partners in his firm’s success.
“What I like about this is you end up turning your consumers into shareholders and I think there’s a lot of power there,” he says. “I thought it was a unique opportunity to create wealth for your individual investor as well as the consumer.”
If the IPO is successful, Davis has plans for that $10 million he is angling at raising. He hopes to invest $2 million in technological upgrades and $2 million in advertising. He also plans to expand the firm’s very small staff and continue to experiment with physical locations (currently the eTailer has 3 mini-stores located in Bloomingdale’s Outlet locations.
“For us, where the world has changed is this whole concept of showrooms. That’s branding and marketing,” he says. “You have 30 to 50 showrooms across the country and they’re cash-neutral, but your brand presence is real and that elevates the brand. We don’t rely on the stores to be our bread and butter profit.”
“You move the conversation from where you buy to why you buy,” Davis says. “[Charitable causes are] what we find is a very powerful emotional layer.”