Beauty-in-a-box brand Birchbox has changed up its ownership structure.
The New York-based startup, which has raised almost $90 million in funding from noted venture firms like Accel Partners and First Round Capital, has a new majority owner in hedge fund Viking Global, sources confirm to TechDap.
First reported by Recode, Birchbox made some changes to its cap table after failing to find a suitable buyer. We are told that the details are still getting finalized, but that Viking is expected to take on a majority stake after investing about $15 million. Viking previously led Birchbox’s $60 million funding round in 2014.
Birchbox did not respond for comment.
Birchbox has managed to become a household name amongst its targeted demographic of female millennials, but its business has faced challenges amidst growing competition. Ipsy, Glossybox, Sephora and Allure Magazine are amongst the many beauty sample box subscriptions that consumers can buy.
Its boxes retail for just $10 per month. And while they are able to find discounts and partnerships with beauty brands eager to partner with Birchbox, it can still be hard to keep distribution costs down, while also spending on sales and marketing to grow the business. Birchbox hopes that consumers will buy more full-sized products off of its website.
Recaps are not uncommon, but they are usually a sign that a startup is struggling. However, it is an opportunity for Birchbox to raise cash and remain in business while it figures out a longer-term plan.
Birchbox was founded in 2010 by Harvard Business alums Hayley Barna and Katia Beauchamp. Barna left Birchbox and is now an investor at First Round Capital. Beauchamp remains CEO.