Ulta Beauty initiates a venture fund for digital advancements
Ulta Beauty Launches Digital Venture Fund to Invest in Tech Startups
Ulta Beauty, the beauty retailer, has announced the launch of Prisma Ventures, a $20 million digital innovation fund aimed at investing in technology startups. The fund was unofficially announced at Ulta's 2021 investor day and has already partnered with several startups, including Haut.ai, Adeptmind, and ReStyle, focusing on areas such as augmented reality, metaverse, personalization, and technology-powered custom beauty services.
Participants in the fund can leverage Ulta's expertise and resources, gaining access to the retailer's innovation team, consumer insights, and market testing opportunities. The fund is expected to help advance the future of beauty and retail, with previous investments contributing to improved personalization and diagnosis for Ulta's digital hair and skin services.
Ulta's move towards technology investment signals a significant shift in the company's strategy. Prama Bhatt, Ulta Beauty's chief digital officer, stated, "Launching Prisma Ventures is yet another way Ulta Beauty innovatively leads and delivers forward-thinking retail experiences."
In addition to the Prisma Ventures initiative, the company has also announced support for early-stage BIPOC beauty brands through its MUSE Accelerator program. This program provides resources, mentorship, and time for new brands, following similar initiatives launched by retailers such as Target, Sephora, and Walmart.
Ulta Beauty recently reported strong first-quarter performance, with sales rising 21% year over year to $2.3 billion and comps also rising 18%. However, inflation and a decline in online prestige beauty sales (-14% year over year)[1] across the industry could impact the company's continued growth.
[1] 1010data, July Report.
- The investment in technology startups by Ulta Beauty's Prisma Ventures could potentially revolutionize the beauty industry, particularly in areas like personalization and AI-powered services.
- Ulta Beauty's strategic shift towards technology investments, as seen in their Prisma Ventures fund, may also have far-reaching implications for the broader retail sector, especially regarding the integration of technology and finance.
- Amidst the challenges of inflation and a decline in online prestige beauty sales, Ulta Beauty's commitment to supporting early-stage BIPOC beauty brands through the MUSE Accelerator program underscores their dedication to fostering diversity and innovation within the industry.
