Hair color business Madison Reed has raised $52 million after doubling itd business during the coronavirus pandemic.
Madison Reed said it saw sales surge 130 percent in 2020 as more people colored their hair at home, and industry sources said the company now has well in excess of $100 million in sales.
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“We have a completely different business than we had 18 months ago,” said Madison Reed founder and chief executive officer Amy Errett in an interview. “People woke up to realize that hair color is essential. It’s not just desire, it’s not just fashion.”
At the peak of COVID-19 in 2020, Madison Reed was selling a box of hair color every five seconds, Errett said, noting that many people who switched to at-home coloring have been sticking with it. “They aren’t just going to switch back,” Errett said.
With the new round of funding, Madison Reed plans to ramp up services related to hair coloring, open more Color Bars, make more hires and launch more products. The business recently launched digital video consultation services to assist at-home hair colorers, and a mobile app is in the works, Errett said.
Madison Reed opened 16 more Hair Color Bar locations during 2020, and plans to have 60 locations by the end of 2021. Errett said the company has opened two Mini Bar locations, which sell Madison Reed products and are staffed by salespeople who can help customers looking for IRL color consultations. More of those will roll out, as well, she said. The salons are often employing colorists from salons that have struggled during the COVID-19 pandemic, Errett noted.
Madison Reed was early to the direct-to-consumer hair coloring business, and has since expanded into retail with Ulta Beauty. The company’s hair color formulations are meant to be cleaner than traditional hair color, and do not contain PPD, ammonia, parabens, resorcinol, pthalates, gluten SLS or titanium dioxide.
Errett declined to talk specifics around numbers, but did say she could see the company one day hitting the public markets. “We’re building an enormous company. Do I think this company could go public? Absolutely. Am I excited about the opportunity? You bet,” Errett said. “We spend all this time worrying about what the end, and the beauty is every day — we get to do this.”
Madison Reed’s latest funding round was led by True Ventures, with participation from existing investors Norwest Venture Partners, Comcast Ventures and Shea Ventures. New investors include Goldman Sachs, Motley Fool Ventures, Portfolia Rising America Fund and Portfolia FirstStep Fund. Madison Reed has raised more than $180 million in funding over several rounds.
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