Prestigious French luxury goods conglomerate LVMH has acquired home-grown beauty e-commerce start-up Luxola for a figure believed to be in the tens of millions of dollars.
The purchase of four-year-old Luxola is being done through LVMH's cosmetics unit Sephora.
The deal will enable Sephora to expand its business in South-east Asia using Luxola's e-commerce platform as a springboard.
Ms Anne-Veronique Bruel, Sephora Asia president, said in a media statement yesterday: "Investing in Luxola is a unique opportunity to penetrate the online beauty market and accelerate Sephora's growth in South-east Asia."
Luxola has 120 staff in 12 markets in South-east Asia, Australia, the United Arab Emirates and India. It sells about 10,000 beauty products from 300 brands, including Clinique, SK-II and L'Oreal.
Industry insiders said Luxola struck an eight-figure deal, making it one of the largest start-up acquisition deals in the last three years.
It would be on a similar scale to the 2013 reported US$60 million purchase of Asian Food Channel by American television network Scripps Interactive Network Luxola founder Alexis Horowitz-Burdick, 33, an American, is elated and believes the deal vindicates her passion for e-commerce.
She is grateful to her team for standing by her since Luxola's founding. Her early, key employees were given company shares, so they also gained from this deal.
Luxola's early years were tough.
"In the first year, there were a couple of months when I had no money to pay employees. It's a terrible feeling as I was responsible for other people's lives. It's okay to ruin myself but I could not ruin others," she told The Straits Times yesterday.
But her staff stayed on and she found the funds to keep Luxola going. Ms Horowitz-Burdick raised US$15 million for experienced staff and business expansion.
Raising funds was tough in 2011 as it was early days for e-commerce, then an unproven business. But investors, including local and foreign venture capital and investment firms Wavemaker Labs, F&H Fund Management, QueensBridge Venture Partners and Gree Ventures, believed in Luxola's mission and invested in it.
Wavemaker's managing partner Paul Santos said: "In less than three years, they managed to serve 12 markets, grow revenue 100 times, achieve leadership in the online beauty business and is now acquired by a global market leader. Luxola is a trail blazer."
Ms Horowitz-Burdick, who first came to Singapore in 2008 with a start-up consulting firm, said: "I knew that e-commerce could thrive in this region because consumers were tech savvy. I looked at the different market areas and beauty became apparent as a business opportunity because it is underserved in South-east Asia."
She discovered that beauty products were found mainly at shopping mall counters, which were often brand specific.
"There was also no neutral place and unbiased information for them to find out about these products. So Luxola was started for women who wanted the convenience of having a wide choice of products under one roof."
She was raising funds for further expansion when LVMH proposed the acquisition. Now she no longer has to worry about funds and will continue to work with Luxola and Sephora to expand the beauty e-commerce business in the region.