EXCLUSIVE: Beach House Launches Venture Arm
With annual revenue set to surpass $250 million this year from their homemade brands, Beach House Group is branching out.
The Los Angeles-based brand incubator responsible for Pattern with Tracee Ellis Ross, Moon Oral Beauty with Kendall Jenner and Odell Beckham Jr. and Florence By Mills with Millie Bobby Brown is getting into investing in what it describes as a non-traditional route with the launch of Beach House Ventures.
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Unlike the strategics’ venture funds which are mainly widely spread across small, minority and hands-off investments, Beach House Ventures will make in most cases majority investments and plans to be very hands-on. Investments are expected to on average range between $2 million and $10 million per brand.
“We just feel we can be rocket fuel to go blow up these businesses,” said entrepreneur Shaun Neff, who cofounded Beach House Group with former Conair exec PJ Brice in 2018.
“There’s venture out there, there’s private equity and a lot of that is they give you money but they don’t really offer too much besides cash,” he continued of the difference between BHV and other investment companies. “[They] may act like they’re going to help out a lot, but they don’t know buyers’ names. They don’t have their phone numbers. They’ve never built a company on their own. So I think we’re offering potential partners something very unique and different.”
Brice chimed in that BHV isn’t looking to plant as many seeds as possible, hoping that one hits, but rather its vision is to only do a couple of deals a year for the next few years because there’s only so much its platform of shared services, including legal and sales, can take on.
“We’re going to be very disciplined. We’re going to be very thoughtful about the brands we choose to invest in,” he said.
As for what Neff and Brice are looking for in potential brands, it’s anything from visionary founders with brands that have that “wow” factor, up-and-coming companies with a proven track record of success in garnering engaged communities, innovative products that show promise and exhibit market differentiators, to unique founders with a story to tell.
On categories, Neff said it’s “anything that would live in a Sephora or Ulta,” revealing that BHV is already in conversations with a number of brands in the categories of clinical skin care, unique cosmetics and sunless tanning, although he didn’t divulge names.
“There’s tons of insanely talented founders out there with differentiated brand stories or just something magic that they’ve already proven out,” added Brice. “But they might not have the capital and in many cases, founders might not have the experience that we have in building brands, understanding the pitfalls, the challenges, how to get through. Why not leverage this incredible best-in-class shared service platform that we’ve spent all this time and money creating, which has the capacity and the bandwidth to do much more?”
As for Beach House Group, it’s working on a new fragrance brand next year, which will be its first not tied to a celebrity. Details, including a brand name, are yet to be disclosed.
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