The beauty industry’s newest investor is a real shark. Billionaire and Shark Tank star Mark Cuban recently invested in a beauty brand for the first time when he invested $400,000 in Youthforia, a makeup and skincare brand founded by Fiona Co Chan, in an episode of Shark Tank that aired earlier this year.
Known for his investments in technology, cryptocurrency, and his majority stake in the NBA’s Dallas Mavericks, Cuban’s first color cosmetics investment is somewhat out of left field. Previously, Cuban invested in skincare brands including Mad Rabbit, a tattoo aftercare brand, Art of Sport, a skincare line co-founded by Kobe Bryant, and Tania Speaks Organic Skincare, among others, but his investment in Youthforia marks the first time the investor crossed over into cosmetics.
So why did he decide to invest in color cosmetics, and will he continue to invest in other makeup start-ups? In this exclusive interview, BeautyMatter caught up with the successful entrepreneur and investor to find out more about his beauty investments and where he sees opportunities in the beauty industry from an investment perspective.
A Shark Tank Success Story
Cuban is Shark Tank’s most prolific investor, having invested $29 million in at least 85 companies. Some of the most successful investments he’s made on the show include the preschool app Brightwheel, Dude Wipes, a flushable toilet paper alternative, and BeatBox, an alcoholic beverage brand. On average, he invests $233,529 in exchange for a typical 23% equity stake.
When Youthforia founder Fiona Co Chan entered the Shark Tank, she went in asking for $400,000 in exchange for 5% equity. With over $2 million in lifetime sales over a period of 16 months, Chan impressed the sharks and received positive feedback on Youthforia’s products and unique brand proposition (makeup you can sleep in). Cuban initially turned down the opportunity to invest in the brand, but came back in at the last second with an offer that Chan couldn’t refuse: $400,000 for 8% equity. This marks Cuban’s first investment in a cosmetics brand on Shark Tank.
“Sometimes you bet on the horse and sometimes the jockey,” Cuban exclusively tells BeautyMatter about the historic deal. “In this case, I was and continue to be impressed by Fiona.”
Like many founders who came before her, Chan didn’t know what to expect when she pitched the sharks the opportunity to invest in her burgeoning makeup brand. Considering Cuban had never done a makeup deal before, she was pleasantly surprised when he struck a deal with her, and they’ve continued to build a strong relationship post-Shark Tank as Fiona continues to expand its product offerings.
“He's so supportive and he's great to work with,” says Chan. “Ever since the deal closed, I told him that I was getting ready to launch our foundation that you can sleep in. He's been a great thought partner in helping me think through the launch, as well as [thinking] through growing the business. He's really collaborative.”
Cuban also made a deal to invest in Curie, a body care brand founded by Sarah Moret with fellow investor Barbara Corcoran. The duo offered $300,000 for a 10% stake in the company and 4% ownership in advisory shares, which Moret accepted live on-air. When asked about this investment, Cuban says the deal with Curie “never happened” due to contract complications. Representatives from Curie refused to comment on the terms made after the show aired, although it appears Corcoran still went through the deal on her own. Last month, Curie launched in 4,300 Walmart locations nationwide and on Walmart.com, solidifying its position as a profitable 8-figure brand with 900% year-over-year sales growth.
Cuban’s Strategies for Growth
Color cosmetics is a far cry from Cuban’s typical investments in the technology and pharmaceutical industries, but he’s no stranger to the space. Cuban has two teenage daughters with his wife Tiffany Stewart, which he says played a role in his decision to invest in Youthforia.
“I also give some extra weight to any business my daughters may take an interest in learning about at some point,” says Cuban.
Cuban admits he doesn’t know this industry as well as others, but he knows how challenging it can be to succeed in such a crowded market, particularly for new and emerging brands. “It’s brutally competitive,” he says. “Either you have a big-name celebrity or an established brand, or you have to be innovative and agile. Every successful start-up I’ve done or invested in has these qualities. Fiona is both.”
Youthforia has continued to expand its wholesale channel in the last year, landing in 525 Ulta Beauty doors and at Thirteen Lune inside JCPenney. Following the Shark Tank investment, Youthflria closed a seed round of funding from True Beauty Ventures and Willow Growth Partners in April 2023. The infusion of capital will support the brand’s expansion into wholesale, particularly at Ulta, where Youthforia has almost doubled its footprint.
Cuban has extensive experience in guiding brands through the retail distribution journey and coached Chan through the process. “Retail can be very profitable or it can put you out of business,” he says. “What I tell all my CPG companies is to not chase sales totals or resume builders. Big rollouts take a lot of cash and have a lot of risk.”
“I’m a fan of programs like Youthforia has with Ulta,” he adds. “Roll out at a scale that you can have impactful margin dollars (as supposed to just sales) and make Ulta and all your customers so happy they brag about your product to their friends.”
Cuban says Ulta has been “an incredible partner,” and he even attended the launch event for Youthforia’s new foundation, which was held at an Ulta in Dallas last month.
Cuban’s diverse portfolio has made him one of the most successful investors on Shark Tank, and made the move into beauty easy, considering some of the same principles for success apply to brands in different industries.
“I think Mark has been so successful in such a wide variety of industries that he's able to spot specific patterns and draw those connections,” says Chan. “I will say that his advice is usually exactly what I need to hear or think about when I'm working through challenges.”
One of Cuban’s best qualities as an investor, according to Chan, is his empathetic insight into what it takes to build a successful brand. “He's been a founder before, many times over, successfully,” she says. “He gives really thoughtful advice—sometimes even down to very nitty-gritty tactical advice.”
Future Beauty Investments
While Cuban is still new to the beauty industry, he can still see plenty of opportunity in this space. The beauty industry has seen an influx of celebrity brands in recent years, but being accessible is oftentimes a better marketing tool than creating an aspirational brand.
“I think there are so many personality-driven brands that there is room for personal connection,” he says. “A huge celeb isn’t going to comment or reply to you on TikTok. Fiona will. Having that interaction builds loyalty and referrals and also provides amazing customer feedback for future development.”
While it’s still too early to tell whether his investment in Youthforia has paid off, Cuban is committed to making sure the brand is successful. When asked if he would invest in a cosmetics brand again in the future, his initial response was a sarcastic "no," “because Youthforia would just put them out of business!”
His real answer is a cautious "yes," he could see himself investing in another beauty brand in the future, but he’s still betting on Chan to take it all the way to the finish line. “I’m learning a lot, and I could see it,” says Cuban. “Particularly if it complements Youthforia.”
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