Mighty Patch-maker Hero Cosmetics Lands PE Investment
Hero Cosmetics, a beauty line best known for its line of hydrocolloid acne patches, has secured a minority investment from private equity firm Aria Growth Partners.
Terms of the deal were not disclosed, but Hero is growing swiftly — the company said it posted 300 percent growth in 2020 and expects to do more than $80 million in retail sales in 2021. This is the first time the company has raised any outside capital.
“We knew we were sort of at this moment of scale and big growth, and we knew it was time to get other people who could help us take the business to the next level,” said Ju Rhyu, Hero cofounder and chief executive officer.
This is also the first deal from Aria, a new private equity firm founded by partner Trevor Nelson, formerly of Alliance Consumer Growth, and principal Jackie Dunklau, formerly of Cavu Ventures. They plan to invest in founder-led businesses across consumer product categories, including beauty and personal care, as well as food and beverage and household products.
Hero was founded in 2017 by Rhyu with Dwight Lee and Andrew Lee. The business has focused on selling skin-care products online on its own site, as well as Amazon and Target.
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“We’re a problem-solution brand. We want to help people who suffer from acne or any type of breakout from products that work, and use our products,” Rhyu said.
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With the investment, Hero plans to develop more products and build out a leadership team, Rhyu said. “We’re at that point of really scaling the business so we’re going to be hiring a bunch of leadership roles,” she said.
Later this month, Hero will launch a three-step acne-prevention system called Clear Collective, which will be sold at Target and on the brand’s site. Hero’s products are also sold at Ulta Beauty, CVS, Anthropologie and Urban Outfitters.
Hero’s focus has been on acne treatment for the face, but the brand is considering expanding into body care as well for a more “holistic” approach, Rhyu said.
“We’ve actually done a lot with a pretty tight [stockkeeping unit] assortment. There’s a ton of whitespace to bring — we call it the ‘magic moment’ with Mighty Patch — into other product format and product categories,” Rhyu said.
Nelson said Aria wanted to invest in Hero because the company has built a “thoughtful platform” for functional skin care.
“If you bring innovative products in other parts over time of skin care, we believe there’s going to be an audience there,” he said. “The opportunity is huge.”
Dunkalau noted that Hero has been able to establish itself as a “skin authority and solution-based skin-care company” in the competitive acne-patch market.
“It feels like there is a lot of white space for the brand both from physical products because they have a limited assortment now, and also distribution,” Dunkalau said.
Michael Toure of Toure Capital advised Hero on the deal.
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