Elephant in the Room
Another Female-Founded Breakthrough Beauty Brand Sells Big and Makes Bank
Legendary department store beauty brand Shiseido swoops up cult status, clean, green beauty machine Drunk Elephant for a lit $845 million.
With IT Cosmetics CEO/Co-Founder Jamie Kern Lima pocketing nearly $600 million after selling her cult corrective cosmetics company to beauty conglomerate L’Oreal late last year, another buzz-worthy beauty brand female founder is set to make bank on the sale of her beauty blogger-beloved brand.
If you haven’t heard of celeb-status skincare company Drunk Elephant and its simplistic, yet sophisticated, line of cutting-edge, clean, cruelty-free formulations that promise to plump, perfect, protect, lighten, brighten, tone, and tighten your complexion, you’ve been living under a rock. With its social media-obsessed C-Firma Vitamin C Serum and its innovative 72-hour retention reservoir, barely-there mineral sunscreens, retro whipped moisturizer, antioxidant virgin Marula oil, and soothing alternative retinol serums, the beauty brand with the peculiar name has solidified its spot on the skincare scene. Female founder and CEO Tiffany Masterson just sold her fast-growing beauty brand to the cool tune of $845 million to Japanese-based cosmetics company Shiseido, who also owns headlining cosmetics companies NARS and Bare Escentuals. Masterson is expected to stay on board as the brand’s chief creative officer and president and will pocket close to $120 million after the impending sale closes at year’s end, as predicted by Forbes. The female-founded squeaky-clean beauty brand has become one of the fastest-growing, luxury skincare lines in recent years. Backed by San Francisco private equity firm VMG, Drunk Elephant enjoyed net sales of toppling $100 million last year alone.
With a myriad of “new and now,” cult-fave makeup and skincare companies lining the shelves of big beauty retailers like ULTA and Sephora, as well as skincare-based e-commerce sites, legendary beauty conglomerates like L’Oreal and Revlon are more than willing to shell out exorbitant bucks to acquire these boutique beauty brands due to their built-in cult following and loyal customer base. Unilever recently acquired the prestigious Japanese-based skincare brand Tatcha for a reported $500 million last June. While Drunk Elephant was said to have hoped to make $1 billion from the brand’s sale originally, even at $845 million the implied valuation exceeds 8 times in sales, making the impressive acquisition one of the biggest for a fairly young skincare company – and minting 50-year-old Masterson a prodigious fortune in the process.
Masterson founded Drunk Elephant in 2012 in Houston while she was a stay-at-home mother of four. With the help of a rock star skin care chemist, she developed game-changing, highly- effective, revolutionary serums, dream creams, cleansers, sunscreens, and peels formulated without what she deemed “the suspicious six” – essentials oils, drying alcohols, silicones, chemical sunscreens, fragrances, and sodium lauryl sulfate. At brand inception, her brother-in-law signed on to invest $300K, while her brother invested an undisclosed figure and became the burgeoning beauty brand’s president. One of the top-selling, obsession-worthy brands in the billion-dollar beauty biz, its exclusive brick-and-mortar is none other than beauty retail giant Sephora. Masterson named her budding brand Drunk Elephant based on the long-held myth that elephants love to eat the fallen fruit from Marula trees. Once the fruit is consumed, the process of fermentation occurs inside the tummies of the elephants, causing them to become drunk! Who knew?
“I don’t look at other brands. I don’t go into Sephora anymore,” Masterson told Forbes in 2017.
“I stay close to home and stay in my own lane. I’m a consumer first.”
And, now, she’s sitting pretty.