March 13th 2024.
A recent report has shed light on the increasing success of Black-owned beauty brands among a diverse range of shoppers. However, this positive trend is contrasted by a decline in venture funding for these very companies.
According to the Economic Advancement Report released by Braintrust Founders Studio, consumer spending on Black-owned beauty brands reached an impressive $142 million in 2023. The data was collected through a partnership with 209 beauty company founders, the majority of whom were Black women. This marks a significant increase of 42% from 2022, where venture-backed companies only accounted for less than $100 million in sales. This growth can be attributed to the strong social media presence of these founders and their companies, which has attracted a diverse customer base.
Interestingly, the data also reveals that Black-owned beauty brands are not solely dependent on Black consumers for their profits. In fact, customers of Asian, Hispanic, and white descent combined purchased more products than their Black counterparts. This further proves that these entrepreneurs are creating beauty and wellness products that appeal to everyone.
Unfortunately, the success of Black-owned beauty brands comes at a time when venture capital funding for diverse entrepreneurs, especially women, is scarce. The report highlights that funding for Black founders has decreased to a worrying 0.05%. Despite this obstacle, established Black-owned companies continue to thrive and grow.
Co-founders of the Braintrust Fund, Kendra Bracken-Ferguson and Lisa Stone, emphasized the significance of this achievement. They stated, "These data further prove that Black entrepreneurs are creating beauty and wellness products that everyone buys. Despite the decline in venture funding for Black founders, these entrepreneurs are driving sales for leading retailers both online and in-store, and creating jobs. We are proud to celebrate the commercial and cultural leadership of our members, the majority of whom are Black women."
This success not only showcases the profitability and longevity of Black-owned beauty brands but also paves the way for more diversity within the industry. As these entrepreneurs continue to thrive, they are also opening doors for future diverse founders to follow in their footsteps. This serves as a reminder of the important role that diversity plays in driving innovation and growth in the beauty and wellness sphere.
In related news, Melissa Butler's The Lip Bar has emerged as the leading Black-owned brand in Target, further solidifying the impact and influence of Black entrepreneurs in the beauty industry.
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