Funding

Madison Reed lands $33 million in funding

The hair care company plans to add 20 new color bars this year.
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Madison Reed

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Amy Errett, founder and CEO of Madison Reed, operates her business with one leading philosophy: People will always want to get their hair colored.

Another round of funding continues to make her case. Today, the San Francisco-based hair-care company announced it’s raised $33 million, bringing its total funding to date to ~$250 million.

  • The round was led by Sandbridge Capital, and included participation from Jay-Z’s Marcy Venture Partners.

Madison Reed plans to use the $$ to grow its brick-and-mortar presence, hire 850 new colorists this year, and expand its product offerings.

“Covid taught us very clearly that no matter what happens, [women] can color their hair,” Errett told Retail Brew.

Building it out: The company has added 50 color bars over the last two years, up from just 12 in March 2020.

  • Its products are also available across Ulta stores and through Ulta Beauty at Target, alongside Madison Reed’s website and Amazon.

One learning since doubling down on brick and mortar: “When we have more than either three or four stores—it depends on the per capita region in a region—[but] our hair color bars work. Our online business explodes and Ulta explodes. It floats every single boat,” Errett explained.

  • To capitalize on growth, Madison Reed plans to open 20 more this year and operate ~80 locations by the end of 2022.

Starting as a DTC company in 2013, Madison Reed’s online biz is still key. During Covid, it was selling a box of hair color online every five seconds, Errett said; today, e-comm sales make up 50% of the business.

Growing pains: But the company’s growth has not come without its challenges. Madison Reed eventually had to hike prices by 10% as operational costs went up, Errett said. The company, which produces its hair color in Lombardy, Italy, also had to tackle supply-chain disruptions, which has led to delayed deliveries.

  • Errett, however, said she’s been able to handle issues by having a “heavy inventory” in place.

“This is an unlikely category that a lot of people doubt,” Errett said. “Pandemic or not, we’re going to power through this. And we’re going to do it in a way that just is steadfast.”—JS

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