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Birchbox head skywards with new marketing and international expansion plans after raising $60 million

Ecom­merce ana­lysts who’ve been read­ing the mar­ket­ing runes over the years will know that the rage for ped­dling “things in a box” kicked off in a big way a cou­ple of years ago and then fiz­zled. Many of the ideas — sex toys in box­es, booze in box­es, razors in box­es – turned out to be fads with lit­tle longevi­ty. But a few things-in-box­es ideas have gone from strength to strength, prov­ing much more durable. And Birch­box, pur­vey­or of month­ly sub­scrip­tion box­es of beau­ty sam­ples and one of the most suc­cess­ful ecom­merce star­tups in New York, is def­i­nite­ly among them.

Suc­cess in a box

It doesn’t take a genius ecom­merce ana­lyst to appre­ci­ate that if a start­up suc­cess­ful­ly rais­es $60 mil­lion in Series B, as Birch­box has just done, it’s con­vinced some astute investors that it’s got a hon­ey of a busi­ness mod­el. Attract­ing 800,000 sub­scribers in three-and-a-half years and gen­er­at­ing $90 mil­lion in annu­al sales prob­a­bly had some­thing to do with it. Add to that the fact that the full-size ver­sions of its prod­ucts that it sells on its ecom­merce site now account for an extra 30 per­cent of its rev­enue, and the annu­al total ris­es to $125 million.

Not bad for a start­up which, pri­or to the Series B, had raised just $12 mil­lion in ven­ture fund­ing. Today, it works with 800 brands and employs 250 staff.

Per­haps the ques­tion form­ing on the lips of the intrigued ecom­merce ana­lyst at this point is why a com­pa­ny that appears to be awash with rev­enue should decide to raise such a huge sum?

A big idea

For Birchbox’s co-founder and co-CEO Kate Beauchamp, it’s all to do with the real­iza­tion that what start­ed out as a small idea has actu­al­ly turned out to be a big idea. Birch­box has been active­ly grow­ing the mar­ket in beau­ty prod­ucts, not by com­pet­ing with bricks-and-mor­tar stores but by trans­form­ing pas­sive beau­ty shop­pers to pas­sion­ate­ly active ones online, (how­ev­er it did open a bricks-and-mor­tar store in Man­hat­tan in March).

Big ideas, Beauchamp says, call for big cap­i­tal. The com­pa­ny will use the mon­ey to dri­ve growth. Some will go into increased mar­ket­ing, prob­a­bly includ­ing TV and mag­a­zine adver­tis­ing, while inter­na­tion­al expan­sion will prob­a­bly gob­ble the rest (Birch­box is eye­ing inter­na­tion­al mar­kets, includ­ing Cana­da, France, Spain and the UK).

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