Retail and Direct To Consumer

A Lot Of Nailcare Startups Are Raising VC. What’s Up With That?

Not everyone spends a lot of time or money on nailcare. But among those who do, the resources that go into a perfect manicure and pedicure can be considerable.

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A standard salon visit every two weeks, for instance, easily costs over $1,000 a year. Premium polishes and press-on nails can add up to hundreds for at-home care. Add in custom nail art and other options, and the sums go stratospherically higher.

All of this may seem other-worldly to those whose self-care routine consists of using some well-worn clippers every week or so. But for a raft of recently funded nailcare startups, founders and investors are betting that enthusiasts can form the basis for highly scalable and profitable businesses.

“I think you’re looking at a space that’s really been quite analog, and really taking that experience and making it digital,” said Pree Walia, CEO and founder of Preemadonna, a startup offering a nail-painting robot and manicure products.

The Silicon Valley-based startup is one of at least 10 U.S. nail-focused companies that have raised capital in the past couple of years (see list). Funded business models range from manicure robots to custom stick-on nails to extra hygienic, sustainable salon experiences. Collectively, the group has raised around $80 million in equity funding, per Crunchbase data.

It’s not a particularly large sum in comparison to the addressable global market. One report pegs the global nailcare products market at around $9.9 billion last year. Nail salons are another big revenue driver, with the U.S. market alone estimated at around $8.4 billion a year, pre-pandemic.

More money in at-home options

As with many sectors, nailcare has been heavily impacted by the pandemic, with salon devotees increasingly shifting to at-home care. Founders say to some extent the past year accelerated trends already underway, many of which should favor startups.

“Historically it was a commitment: going to a nail salon and getting one color that will last for a couple weeks,” said Jooyeon Song, founder and CEO of ManiMe, a startup that sells stick-on nails, custom-sized via smartphone, that come in a variety of color and design choices.

With the shift to at-home care and stick-on extensions, Song said consumers are looking to switch their nail style more frequently. Increasingly, it’s possible to quickly swap out nails in the same way we change accessories from day to day to match our mood, ensemble, or the occasion at hand.

Preemadonna’s Walia is also firmly aboard the nails-as-self-expression bandwagon. Her company’s signature product, a Kickstarter-backed device called the Nailbot, allows users to print their own pictures directly on their nails using a dedicated app. Many of the early adopters are what she describes as maker types, who want to make a personalized style statement.

Living in the Instagram age

Younger consumers, Gen Z in particular, are a core target market for many startups. Digital natives tend to have a keen appreciation of personalization and a desire to show off their latest look on social media.

But they’re not the only big nail spenders.

“It’s a category that’s multigenerational,” Walia said, noting that the Nailbot, (currently priced around $200 with a long-term objective to get it down to around $100), tends to be popular with households in which there’s more than one user.

It’s not the only company looking to bring automation to the at-home manicure space. New York-based Nimble has raised venture and Kickstarter funding for its device, which promises to “paint salon quality nails from the comfort of home.” Coral Labs, a Y Combinator startup, is also developing what it describes as “the world’s first smart manicure device.”

Other startups in the space are focused on upgraded polishes and service platforms. Boston-based Minluxe, for instance, operates a network of salons marketing on extreme cleanliness and consistent service and also sells an ethically sourced product collection.

Time to scale

The comparatively small sums invested across a broad spectrum of nail-focused startups indicates that investors like the space but aren’t yet ready for unicorn-sized funding rounds.

To get to that next step, today’s startups will likely need to demonstrate an increased ability to move beyond niche markets and snag a big share of the broader market. They’ll also need to show some recurring revenue, which seems rather feasible considering the nature of the space.

From robotic manicures to tech-enabled salons to stick-on nails, most startups have business models that involve repeat purchases of polishes, custom products or services. I suspect that, given some time to scale, we’ll be surprised at just how much revenue one can generate decorating the tips of our fingers and toes.

Illustration: Dom Guzman

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