Shiseido is making its mark on the venture capital arena with a unique point of view.
Until recently, Shiseido’s venture investments were concentrated in Asia, but that changed with the launch of their corporate venture capital fund, Shiseido Long Term Investments for the Future (LIFT) Ventures, announced in December 2023. As Shiseido’s first venture fund with a Western lens, LIFT focuses on investing in young companies in the beauty and wellness sphere.
“As a global company, we have several ways we access venture capital,” explained Ron Gee, President & CEO, Shiseido Americas, and Global M&A Leader, Shiseido Company, Limited.
“We have one that’s specific to China, and one centered in Japan. Ours in particular was established with a little bit more of a Western lens to allow us to harness the rest of the globe’s potential in our investment strategy.”
Shiseido’s strategic vision is to be a personal beauty and wellness company. “Our mission statement is beauty innovations for a better world,” Gee said. “We have established this fund so that we can access early stage and truly novel innovations, novel platform technology, novel brands, and really invest and then follow them on that journey as they grow.” Beyond providing funding, LIFT will also provide advice where necessary and when appropriate.
Instead of setting specific goals and deadlines, the priority is to choose the right investment opportunities that fit into Shiseido’s scope of beauty and wellness. The company launched with two investments, Phyla, a probiotic skin care company based in the U.S., and Patricks, an Australian male grooming brand.
Though Phyla and Patricks are very different brands, there are several commonalities that piqued the interest of LIFT. Phyla caught Gee’s eye because of their technology focus, which already has some commercial traction, while Patricks is taking a unique way of entering the prestige men’s grooming marketplace.
Phyla, Gee said, is applying science in a fresh way. “There’s a degree of efficacy that they’re trying to achieve,” he said. “That’s exciting to understand. And at the same time, we’re talking about something that’s not synthetic. So, there are attributes and interesting characteristics to watch and see how they evolve. And, they generate revenue, so they check the box that they’re able to engage.” The dialogue they have with their customers allows them to learn and expand their innovation, Gee added.
Patricks is run by a husband-and-wife team. “They have a 360 immersive idea that has realized successful commercial traction,” Gee said. “For men’s grooming, many have tried, but only some have succeeded to a certain degree. I think there’s a unique approach here, which balances consumer engagement and science; it’s a different blend. How they’re approaching this was very attractive, because it has a salon mindset in a prestige channel. Post-COVID, self-care and self-grooming have not only accelerated, but I think the requirements to be authentic and believable have also increased dramatically. Founders who can do it in a very 360 authentic way are going to have more probability for success in the future, and we feel that way with Patricks.”
After Shiseido’s success of acquiring Drunk Elephant, it was the appropriate time to consider investing in entrepreneurial endeavours. “As we examined the marketplace more, it’s very clear that in the beauty space the size of the transactions were getting smaller and smaller,” Gee said. “You’ll have some exceptional cases, but if you’re looking at the centre of the marketplace for transactions, they’re getting smaller. When we look at these areas, we want to be more of an outreach company that tries to get to know these companies and their founders when they’re at an earlier stage. We felt that with marketplace trends and how we’re trying to expand our mission and strategy if we want to be a differentiator, we have to start earlier. That’s the reasoning behind LIFT.”
When deciding on which companies to invest in, it’s all about the company itself, and whether they feel there is science and wellness that relates to skin health. That means they are willing to look beyond traditional beauty brands that straddle the wellness world, such as companies with a focus on sleep, for example. “There are a multitude of connections that make sense in our strategic framework,” Gee said. “When you think about venture funding, you don’t want to pack tightly all your investments around the same area; you do need to have some diversification.”
To determine if a company is right for LIFT, Shiseido looks for proof of concept that has traction and will succeed with consumers. Investment won’t just be limited to brands — platforms and services will be considered, too.
Though they are in constant discussions with potential interested parties, LIFT can’t share who they’re speaking with. “Building relationships takes time, that is very important to us,” Gee said. “As part of our omotenashi spirit, this isn’t just about the innovation. It’s also about people and the culture they are developing.”
Orginally from: CEW US written by CELIA SHATZMAN.
