L’Oréal—the world’s largest cosmetic company—has announced an investment in the Founders Factory, a global multisector digital accelerator and incubator.
The investment makes L’Oréal Founders Factory’s exclusive partner for investments in beauty tech startups worldwide, fulfilling part of L’Oréal CEO Jean-Paul Agon’s vision of the transformative power of digital for the beauty category.
“This strategic investment will give L’Oréal direct access to a powerful global ecosystem of exciting startups and innovative technologies at their earliest stage allowing us to invest in and nurture innovative business models based on digital platforms to better serve consumers’ aspirations,” said Lubomira Rochet, Chief Digital Officer, in a press release.
“Leveraging the Founders Factory’s ecosystem and experienced entrepreneurs in residence,” added Rochet, “L’Oréal will provide significant contribution to the development of incubated companies in the beauty sector by bringing our knowledge of the beauty industry, the beauty consumer and our marketing and innovation expertise in all beauty categories.”
L’Oréal and Founders Factory will invest and scale five early stage startups and co-create two new companies from scratch every year.
“At Founders Factory we provide ambitious forward-thinking blue-chip companies with a way to develop innovative technology startups away from their day-to-day business and connect them with elite entrepreneurial talent from across the globe,” said Founders Factory co-founder Brent Hoberman, in the press release. “Marrying our expertise in digital with L’Oréal’s brands, scientific research, and audience reach offers a compelling opportunity to build and scale the next generation of beauty startups.”
L’Oréal will be represented on the Founders Factory board by Rochet and three L’Oréal executives, who will also hold seats on the beauty sector committee of Founders Factory.
L’Oréal is embracing digital innovation as a next step in its own brand evolution. “The company is starting to see innovation as a growth driver,” notes The Drum. “It’s not an easy environment to create but one that is fundamental to success as can be seen in the way Unilever, Visa amongst others benefit from startups.”
No stranger to collaboration and mentoring, last year L’Oréal USA partnered with the Grand Central Tech accelerator based in New York. Rachel Weiss, VP Digital Innovation, said at the time, “We’ve been passionate about emerging businesses and startups.” In April 2015, the company hosted a search engine optimization workshop for the startups in the accelerator as, Weiss said, “Just throwing money on the table isn’t going to grow this space.”
Women-led startups accepted into Grand Central Tech will automatically be in the running for L’Oréal USA’s Women in Digital NEXT Generation Awards.
In 2012, L’Oreal established its NEXT Generation Awards honoring five women leading groundbreaking digital-technology companies as fewer than 1 percent of venture capital dollars were going to female-headed companies at the time.
“Now we have influence and credibility with the investment community who are now calling us first about how we can work together,” said Weiss at the time. “A lot of VCs have called us looking at women with startups asking ‘Is this something L’Oreal would use?'”
L’Oréal has been a leading beauty brand for more than 105 years—with the highest investment in research & innovation in the industry. It’s latest investment strategy is insurance for the next 105.