When it comes to beauty investment and M&A deal activity, 2024 ended just as it began—with anticipation. A year ago, as we were entering 2024, dealmakers were buzzing about multiple interest rate cuts to jump-start the market, private equity getting back in the game, and the continued hunger of strategic buyers looking to acquire innovation and access to new customers. Indeed, some of these great expectations came to fruition in 2024, but as we look ahead to 2025, dealmakers find themselves, once again, optimistic and anticipating many of those same things.
For the full year 2024, the BeautyMatter Deal Index tracked 297 deals, up 15.1% from 2023, when it tracked 258. The year started off strong in Q1, when deal activity was up 16.1%, but started to feel like a bit of a roller coaster by Q2, when activity fell 20.3%, and growth deals in particular bottomed out with the lowest number of deals in the history of the Index. Q2 saw just 16 growth deals, a far cry from the average of 43 per quarter over the last four years. But the back half of the year saw a recovery led by strong M&A activity. Q3 and Q4, combined, were up 34.3% and led to a strong finish for 2024. For the year, M&A comprised about 55% of deals, while growth represented 43%. The remaining 2% of deals were the six IPOs the Index tracked in 2024, the most since 2021.
Strength Across Almost Every Category
In 2024, deal activity was up across almost every category tracked by the BeautyMatter Deal Index. The best-performing categories in terms of growth in deal flow were health + wellness (+42.1%), personal care (+40.0%), haircare (+38.5%), retail (+37.5%), skincare (+27.5%), fragrance (+21.4%), technology (+18.2%), color cosmetics (+14.3%), and professional (+9.5%). Brand portfolio and men’s + grooming were flat versus last year. Funds + platforms (-20.0%) and supply side (-9.7%) were the only two categories to show a year-over-year decline.
Q1 Deal Highlights
Q1 saw a flurry of deals across multiple categories. The most active category during the quarter was skincare, with 13 deals. Notable deals included Puig’s acquisition of Dr. Barbera Sturm, Bridgepoint’s acquisition of RoC Skincare, Inspirit Capital’s acquisition of This Works, Vitality Brands’ acquisition of Essano, and the purchase of Selfless by Hyram and Costa Brazil by the brand’s namesakes, Hyram Yarbro and Francisco Costa. There were also a number of growth investments, including those made in Allies of Skin, Skin and Out, Mantle, Nala’s Baby, Cible Skin, and VeraLab.
Q1 was also a standout quarter for health and wellness, fragrance, and personal care. The health and wellness category saw nine deals after a relatively slow year in 2023, when the category averaged just five deals per quarter. Notable deals included L'Oréal and Nestlé’s investment in Timeline, Unilever’s investment in Perelel, L Catterton’s investment in WTHN, Humble Growth’s investment in Momentous, and Famille C’s investment in wellness-focused hotel group Evok Collection.
Fragrance saw eight deals, after averaging just three deals per quarter since 2021. Notable deals included Bogart’s acquisition of Rose et Marius, L’Occitane’s acquisition of Dr. Vranjes Firenze, Manzanita’s majority investment in D.S. & Durga, and Eurazeo’s investment in Ex Nihilo. Two Chinese fragrance brands secured deals, with Ushopal’s investment in Documents and L'Oréal’s investment in To Summer.
Personal care also saw eight deals in Q1. Standout deals included Yellow Wood Partners’ acquisition of ChapStick, Forum Brands’ acquisition of Lola, Compass’ majority investment in The Honey Pot, Aria’s investment in Ultra Violette, The Center’s acquisition of Cyklar, and Justin Verlander and Kate Upton’s investment in Flex Co.
Q2 Deal Highlights
The deal headlines in Q2 were dominated by skincare and supply side deals, with each category logging 11 deals. The skincare deals that stood out included The Estée Lauder Companies’ full acquisition of Deciem; Grown Alchemist’s acquisition from L’Occitane by an investment group led by André Hoffmann and Anna Teal; and Beautycounter’s acquisition by its founder, Gregg Renfrew. Notable supply side deals included Circular’s funding to scale a sourcing platform for recycled materials; Three Hill’s investment in Italian amenities company La Bottega; and Berjé’s acquisition of Global Citrus International and Acelim del Peru. Other deals worth mentioning during the second quarter were Puig’s IPO; L Catterton’s acquisition of KIKO Milano and Stripes Beauty; PCA’s acquisition of the wholesale division of SpaceNK; and the acquisition of Bluebird Climate by rePurpose Global.
Q3 Deal Highlights
Q3 was all about a return to growth investments and a surprisingly strong quarter for color cosmetics. Notable color deals included CORE Industrial Partner’s acquisition of Winky Lux; Westlane Capital Partners' purchase of Beauty Bakerie after its closure earlier in the year; L’Oréal BOLD’s investment in Ami Colé; Shinsegae International’s acquisition of Amuse; Seaweed Bath Co.’s acquisition of Mineral Fusion; Arrotex Pharmaceuticals’ purchase of Nude by Nature; Lucas Venture Group’s investment in BoldHue; and Unilever Venture’s investment in ESQA.
Some of the notable growth deals in Q3 included L Catterton’s investment in Vyrao; Humble Growth’s investment in Salt & Stone; Somerville’s investment in SEEN; L Catteron’s investment in Alice Mushrooms; Felix Capital’s investment in AKT London; Unilever Venture’s investments in Luna Daily, Oak Essentials, Indu, and SkinInspired; Charlesbank’s investment in Front Row; Inspired Capital’s investment in ShopMy; and Prisma Venture’s investment in Myavana.
Q4 Deal Highlights
Q4 saw the normal rush of last-minute deals before year-end. Notable color and hair deals included Helen of Troy’s acquisition of color brand Olive & June; True Beauty Venture’s investment in Crown Affair; and Norwest’s investment in Divi. In men’s + grooming, Bravo Sierra secured investment from existing investors, and Caldera + Lab received investment from HIPstr. Skincare deals included Selva Ventures investment in OneSkin; Willow Growth Partner’s investment in YSE Beauty; and S’Young Group’s acquisition of RéVive Skincare. Q4 was an active quarter for retail. Notable retail deals included THG’s spinoff of technology platform Ingenuity; Saudi Public Investment Fund’s investment in Selfridges; SNR Capital’s acquisition of Thirteen Lune; Mytheresa’s acquisition of Yoox Net-a-Porter; and the Nordstrom family’s take-private of Nordstrom. Other notable deals included Silas Capital’s investment in Hello Cake; Prisma Ventures’ investment in LUUM; HighPost Capital’s investment in Front Row; and Fika Ventures’ investment in Hue.
The Culling of Brands Continued
Despite signs of strength emerging in the back half of 2024, the BeautyMatter Deal Index tracked 25 brand failures during the year. This was a slight decline from the 28 brand failures tracked in 2023. Brand failures, defined as a combination of bankruptcies and shutdowns, were driven by several factors, including persistent tightness in the financing markets, a challenging retail environment, hypercompetitiveness in the beauty category, pressure on margins, and the increasing amount of capital required to manage and grow a beauty brand. As in 2023, the majority of brand failures in 2024 were in the retail category.
Right Back Where We Started
Looking ahead to 2025, dealmakers are, once again, optimistic about the prospects for the year. Like in the early days of 2024, many are looking ahead with expectations of multiple interest rate cuts, increasingly crowded deal pipelines, a revival of private equity spending and portfolio exits, and some even predicting a return of the IPO market in the back half of the year. Just a few weeks in, 2025 is already proving to be as wily as ever with uncertainty around tariffs, and regulatory and geopolitical issues. If there’s one thing I’ve learned over the years, dealmakers are among the most optimistic bunch in the world, so, we’ll see if 2025 lives up to their expectations. Despite the roller coaster of ups and downs, 2024 kind of did.
