On Wednesday, Ulta Beauty launched Prisma Ventures. Prisma Ventures is his $20 million VC fund focused on digital innovation in the beauty space. First announced at his Ulta Beauty Analyst Day last October, Prisma Ventures is focused on investing in early-stage beauty tech startups in four key areas. These include “personalized data-driven technology,” “AR, VR, and the metaverse,” “technology-enabled custom beauty products and in-store services,” and “social commerce.”
“The goal is to define the next chapter of what the future of beauty will be. [looks like]Agustina Sartori, Managing Director of Prisma Ventures at Ulta Beauty, said: The founder and CEO of AR beauty technology company GlamST, Sartori joined Ulta Beauty as Director of Innovation in 2018 when the beauty retailer acquired her company.
About 80% of Ulta Beauty’s VC investment will go into four focus areas, Sartori said. His remaining 20% is for “thinking about what can be really disruptive” in areas like beauty, retail and commerce. Seed and Series A rounds will be the “sweet spot” investment stage for the new fund, he said.
Since October 2021, Prisma Fund has been used to invest in startups Revea, LUUM, Haut.AI and ReStyle. Ulta Beauty previously invested in Adeptmind, Mink and Iterate.ai.
Beyond capital backing, Ulta Beauty aims to form strategic partnerships with the startups it invests in. In addition to the investment, Ulta Beauty gave Iterate.ai “the opportunity to test, learn, deploy and scale a low-code AI innovation platform.” Startup co-founder and CEO Jon Nordmark said:
Ulta Beauty Chief Digital Officer Prama Bhatt said in a statement: Imagine and rethink the future of retail and beauty. “
According to Sartori, brands will not only benefit from “joint strategic partnerships,” but also “market access, innovation teams, consumer insights and access to market testing.” The startup will be able to test the tool on his Ulta Beauty customer base, which includes 37.7 million loyalty program members.
Ulta Beauty doesn’t guarantee to use technology from every company it invests in, but Sartori said it seeks partners “on a case-by-case basis.” Haut.AI, for example, announced a strategic partnership with his Ulta Beauty in March of this year. The startup has developed a comprehensive skin scanning technology, now available as part of the Ulta Beauty app’s skin analysis tools. Ulta Beauty also provides product preference insights to the Haut.AI recommendation system.
“Even before we launched the fund, we were already doing this as a digital innovation, but only from a partnership perspective,” said Sartori. “And with this fund, we have the potential for strategic partnerships and financial support. [we’re] Working together more seamlessly as a closer partner than ever before. “
The acquisition is also part of Ulta Beauty’s technology investment strategy. In the same month that Ulta Beauty acquired his GlamST in 2018, it also acquired AI tech startup QM Scientific, which contributes to the Ulta Beauty app’s recommendation algorithm. Acquisitions aren’t the main goal, but Sartori said:
Ulta Beauty joins the trend of major beauty companies embarking on acquisitions of venture capital and technology companies. L’Oréal Group acquired Modiface in his 2018, and its VC, Bold, invested in various beauty tech startups including Japan-based personalized beauty platform Sparty in May of this year.
“There are a lot of changes going on in the industry, many of which are experimental,” said Sartori. “It’s about being ahead of the curve. Be part of the disruption that’s happening instead of waiting for it to happen.”
