Launched: 2021
Founder: Katherine Power
Key Executives:
2024 Full Year Expected Revenue Range: $100 to $125 million, according to industry estimates.
Offline Distribution Points 2024: All Sephora North America stores; 678
Primary Category: Color Cosmetics
Other Categories: Skincare
Key Markets: United States
Retail Partnerships: Sephora
Primary Distribution Channel: DTC
Other Distribution Channels: Prestige
Funding Rounds: Private Equity
Total Funds Raised: $20 million
In September 2021, MERIT secured a $20 million Series A funding round led by the Growth Fund of L Catterton with participation by Marcy Venture Partners and Sonoma Brands.
Notable Investors / Funding Partners:
Notable Advisors / Board Members: L Catterton
Insight shared by Aila Morin, CMO
I first spoke with MERIT’s founder, Katherine Power, in 2019 when the beauty industry was at peak maximalism. The market was oversaturated with twelve-step skincare routines, 50-shade eyeshadow palettes, and products that required a near-expert level of artistry to master. After struggling to find a brand that merged skin-safe ingredients with luxury quality and ease-of-use, Katherine had an idea for a new kind of makeup brand that would actually simplify what it takes to get ready—a novel idea during the end of the “more is more” 2010s.
I officially joined her in 2020, right ahead of the Covid-19 shut down when makeup sales dropped 40%, and over the next year we continued to refine what MERIT was and who it was for. Designed by makeup consumers—not artists—we imagined MERIT as the antidote to the overwhelming world of beauty. With skin-safe ingredients, impossible-to-mess-up formulas, and wearable shades, MERIT was designed to fit seamlessly into the routines of busy consumers like ourselves.
What are your key business initiatives for 2024?
This year, we’re focused on delivering world-class products to our multigenerational community. Rather than chasing trends, we pay close attention to customer feedback (especially around products and categories they struggle with) to ensure everything we launch has a place in their everyday routine.
We have an incredibly exciting product roadmap for 2024—we’ll both move into new categories and expand our color cosmetics and skincare offerings.
And, as an overall business, we’re focused on continuing to deliver best-in-class growth and profitability. We are thrilled to have just welcomed in a new CEO, Philippe Pinatel, who we are confident will help us continue our current trajectory and help us reach new heights as a brand.
What are you most proud of having accomplished?
MERIT speaks to a feeling all of us have when it comes to modern beauty: overwhelm. I’m incredibly proud of how we’ve been able to break through the noise to create a brand that actually makes getting ready easier. MERIT has grown at such a fast pace—and done so profitably—because our products and story have clearly resonated with a wide group of consumers. On the business side, we crossed well over $100 million in omnichannel retail sales in 2023, which was only our third year in business, and asserted ourselves as a major player in the beauty industry. None of this would be possible without our uncompromising attitude towards product development, differentiated approach to creative storytelling, and prioritization of financial responsibility; the full team has worked together to achieve something beyond our expectations, and we’re excited to keep pushing ourselves this year.
What has been the biggest surprise?
The biggest surprise since founding MERIT has been the immense growth we’ve achieved in such a short amount of time—and all the complications that arise from that. When you build something, it’s always your hope that it resonates with people and they understand the vision and ethos of your brand from day one. We initially expected MERIT to be more of a niche brand, but right from the start it was clear that the problems we wanted to solve and the feeling we were speaking to were much more universal than we anticipated.
From the day we launched, the response to MERIT has been so much stronger than we ever could’ve anticipated; for example, we exceeded our year one direct-to-consumer (DTC) sales goal in the first two weeks of business. This reaction was, of course, what every brand hopes for, but it also meant that we had a hard time keeping product in stock in our first year. While we still are seeing outsized demand from customers, we’ve been able to build the business in a way where we can absorb and capitalize on that enthusiasm, which has allowed us to continue to grow rapidly as we mature.
What fuels your competitive advantage?
MERIT is unique for a few reasons—in addition to speaking directly to more mature customers than many of our competitors, we also avoided a traditional hero product strategy. No single product makes up more than 20% of our sales, and over 50% of our customers are between the ages of 25 to 55. While these two points may seem distinct at first, they’re actually very much connected: We sell ready made, easy to use routines to customers who are overwhelmed by the modern beauty landscape.
This focus on the lifestyle and needs of our customer flows through everything from product development, to marketing, to distribution. We think about how much time they have (not much), where they do their makeup (often on the go), and how they want to look (like themselves, but a bit more polished). And, as a result, our customers buy more from us—nearly 50% of our 2023 revenue came from purchases of sets and most purchase three or four products per transaction.
Another major differentiator is that we are truly an omnichannel retailer. We have a roughly 50/50 split between our DTC and Sephora, which is quite unusual in the beauty space. This allows us to tap into the scale and discovery engine that Sephora provides, while also maintaining a direct relationship with a large portion of our customers.
Please share your insight on the future of the beauty industry.
Much of how we created MERIT was based on an insight I gained working at the beauty counter, which was a nearly universal feeling of overwhelmingness when it comes to beauty products. At a certain point, we were all meant to obtain makeup artist level skills—or so we thought—and almost everyone I speak to says “Well, I’m just not good at makeup.” The truth is, with the amount of newness and techniques, most of us aren’t. My hope is being honest about these feelings leads to marketing that actually alleviates the pressure and helps to demystify beauty for busy people; but also that we truly build brands that solve an unmet need in a saturated space.
What is the best piece of advice you’ve been given?
Failure is incredibly important; do it often and get comfortable with it. I learned so much from working at businesses that didn’t work, and we’ve kept that mentality at MERIT. We are a growth team; we spend 80% of our budget on things we know work and 20% on things that are insanely long shots, and that’s how we’ve created an incredibly innovative brand.
What’s the best mistake you’ve ever made?
Joining an early-stage business with a clear product market fit; it was a very expensive device for an audience that would never spend that on a discretionary need, and it was clear within months that it wasn’t going to work. It taught me the importance of marketing products I can identify with, and also seeing the P&L before joining an early-stage start-up. Based on the unit economics and consumer response, it’s clear from day one, if it’s going to work.
Paying it forward, what advice would you give someone contemplating launching a beauty brand?
Before starting any business, consider your product market fit and unit economics often and early—your customer, your AOV, your COGs, your MSRP—those are the things that make a huge difference in the health of your business. Prior to launch, you have the unique opportunity to set it up right, and after working in many start-ups that have either failed or become very successful, it makes or breaks the business long term.
If you could change one thing in the beauty industry what would it be?
The speed of the trend cycle. We take things slowly; product development and how we do launches, integrating feedback and continually adjusting our existing assortment to be as perfect as possible. The art of iteration means more meaningful relationships with consumers and better output, but oftentimes speed and frequency of launches is prioritized. “Slow Beauty” is what I’d like to see more of.
