Key Stats: HelloAva on Republic
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Whether for nutritional supplements or beauty routines and everything in between, millennials seek out personalization more so than past generations of consumers.
Platforms dedicated to personalization are rapidly increasing in the presence of supportive technology, including artificial intelligence. AI is being used to create meals, beauty routines, and vitamin regimens tailored to the individual.
From oil levels, to acne and redness, skin condition is unique to each person. Products, even when recommended, are impersonal and target average skin composition. Even if a product is tailored to a specific skin type, results are rarely tracked as skin care needs change and evolve over time.
HelloAva is an AI-powered platform delivering skincare regimes tailored to the individual. The platform offers a text-based consultation and recommendations that are confirmed by licensed estheticians. The online platform is fully-stocked with any recommended products. Progress on the platform and with the recommended products is then tracked, tailored, and optimized.
Based on this model, HelloAva has a three-pronged revenue stream— sales, advertising, and consultations. HelloAva takes a 50% product margin from wholesale products sold on the site. Advertisements and the $10 consultation fee to chat with an expert dermatologist complete the business model. HelloAva has direct partnerships with large beauty companies including Origins and bareMinerals.
For the most recent fiscal year, HelloAva had $72144.00 in revenue and $71613.00 in cost of goods sold. Despite having just $100k in sales with high COGS, the company’s burn rate has steadily decreased and 2020 revenue projections are promising. The former is not overly concerning, as this was the first real year of getting the business up and running, and a steady increase in revenue and decrease in burn rate foreshadows significant upside potential.
HelloAva blends skincare personalization with tech, but is not the only team to do so. Other tech-enabled skincare personalization platforms include Curology, BirchBox, and Atolla.
Curology offers personalized skin care to target ailments like acne, but does not advertise as an AI or tech-based platform. Recommendations are made through a questionnaire and pictures sent in to the Curology team.
Birchbox also provides some personalized skincare, though through a monthly subscription model. In addition, Birchbox offers a wide variety of beauty products, not targeting skin care specifically.
Atolla, an MIT-based startup, does share the skin focus with HelloAva and incorporates AI technologies. Atolla uses a skin test kit as opposed to a questionnaire to assess skin condition. Though Atolla more severely overlaps with HelloAva in the tech-driven skincare space, HelloAva appears to be further along in funding and has received some significant venture backing.
CEO and Co-founder, Siqi Muo, has been named to Forbes 30 Under 30 and Inc. 30 Under 30. She spent time at Morgan Stanley in Fixed Income Sales and Trading. She holds an M.B.A. and a B.A. from Stanford and has a Master’s in Public Administration from Harvard Kennedy School.
CCO and Co-founder, Kailu Guan, has prior experience at Intel in Tech Design and served as a CoLab Fellow at IDEO before joining HelloAva. She holds a B.F.A from the Parsons School of Design.
Why We Like it
- Large, Trending Market: By creating this platform, HelloAva aims to disrupt the $141B global skincare market. A fraction of this large market is addressable to millennials seeking personalized skincare. Despite this niche nature addressable market, Forbes has named personalization one of the biggest trends in the beauty industry. HelloAva will be very well positioned if it can capture even a fraction of this market.
- Venture Backing: HelloAva has already accumulated backing from several venture firms, including Gingerbread Capital, DHVC, SoGal Ventures, and Long Venture Partners. This grounds credibility in the company and proves that getting in on the ground floor could be rewarding.
- ML Scalability: When it comes to machine learning and AI, the more data, the better. As HelloAva continues to scale, its algorithms will only become more refined, producing even better results. In addition, a database of this size could prove valuable on its own in the event of a potential acquisition.
- Early Traction: HelloAva has done its job in finding customers, but perhaps more impressive is the number of customers retained and pushed through the funnel that culminates in a purchase through the site. HelloAva currently hosts +64k active users on the site, with 60% returning for repurchase.
The Rating: Deal To Watch
HelloAva is a Deal To Watch. The founders have tapped into a large addressable market and identified a clear, trending pain point. From skincare to vitamins, health and beauty personalization is the new standard. In fact, Care/of, a popular personalized vitamin pack company, recently raised $29M in a Series B funding round. And though the field is crowded, HelloAva is poised to emerge as a leader, as the company already has a head start over competitors with funding, proprietary technology, and experienced founders. In addition, any use of AI technology and its accompanying database is an attractive package for any potential acquisition.
HelloAva is still in the very early stages of its go-to-market strategy, but it could prove rewarding to follow the company as it approaches projected revenue milestones. Its initial traction is quite impressive, as is early customer feedback.
Finally, HelloAva is backed by not one, but several venture capital firms, grounding trust in any investment. Getting in at the ground floor could prove to be quite rewarding.
Olivia is a graduate of Wellesley College with a Bachelor's in Neuroscience and English. She has spent time as an investment intern at Glasswing Ventures, an AI-focused VC fund in Boston where she helped develop machine learning algorithms for identifying early signal success factors of startups.