Barely two years down the line, Cairo-based beauty e-commerce startup Source Beauty is defying all the odds and preferences for essential services by investors amidst the current global lockdowns to secure a sizeable pre-seed investment from 500 Startups, the most active global venture capital firm. Source Beauty hopes to further support beauty products made in Egypt as well as and plans to expand its footprint to regional and global markets.
“We are very pleased to receive funding from 500 Startups to support Source Beauty on its growth journey,’’ Lydia Schoonderbeek, Founder and CEO of Source Beauty said. “ With a sustainable and scalable business model with substantial potential for further expansions, our strategy is to emulate Source Beauty’s concept in selected regional and global markets over the next three to five years. We are confident that with the support and advice of the 500 Falcons team we will be able to increase our portfolio of brands and suppliers, invest in human development, and contribute towards economic empowerment by providing a platform for local businesses to sell their products,”
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Here Is What You Need To Know
- Although 500 Startups did not disclose the amount involved in this round of funding, the venture capital firm is known generally to invest $150,000 in companies that take part in its Seed Accelerator programme, with the possibility of follow-on investment of up to an additional $500,000 or 20% of your next priced round of $1,000,000 or more, whichever is lower.
- With the newly raised funds, the e-commerce startup for locally sourced beauty products intends to deepen its platform capabilities, grow its team and expand its footprint to regional markets.
Why The Investor Invested
Speaking on why 500 Startups invested, Mr. Sharif El-Badawi, Managing Partner MENA, at 500 Startups said:
“Our mission at 500 Startups is to back talented entrepreneurs and help them create successful companies at scale and Source Beauty is one such company. Despite the current COVID-19 situation, we are delighted to have invested in this e-commerce beauty platform. We wish Lydia and her team the very best and look forward to seeing them scale their business to the next level and excel in the near future.”
The Silicon-Valley based venture capital firm 500 Startups is the most active early-stage Venture Capital Fund in the Middle East and North Africa (MENA) region and was established in 2012. Since its first investment in the region, 500 Startups has committed to investments in over 160 startups across the region. With the launch of 500 Falcons, a MENA focused fund in 2017, 500 Startups plans to invest in approximately 100–150 companies over a three-year period in addition to follow-on investments into the top performing companies.
For further information, including its assessment criteria for startups please check out their website: https://500.co/how-500-startups-picks-investments/
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A Look At What Source Beauty Does
Established in 2018, Source Beauty was founded by Lydia Schoonderbeek. With its new-to-the market business model, Source Beauty has grown its sales orders seven-fold and simultaneously increased revenues nine-fold since their launch, with an offering of over 55 local brands to-date. Over the past year, the startup has demonstrated viability of its business concept, fulfillment of a real market need, loyalty of a growing customer base, accelerated business performance and it comes without surprise that this young, fresh venture received funding from 500 Startups to realize further growth.
From an economic standpoint, it is undeniable that Egypt’s beauty industry has a positive contribution to the Egyptian economy, with an anticipated market size in excess of USD 200 million. Schoonderbeek explains:
“Millennial consumers use social media platforms to keep up with beauty trends and for purchase motivation. Source Beauty guides them and focuses on building a personalized relationship with each of its customers’ beauty needs providing a user-friendly browsing and buying experience. Despite the current unfortunate pandemic situation, we have seen growth in our customer base and sales numbers.”
“The local beauty market remains widely untapped and growing year-on-year at around 15 to 20%. Keen on shaping the market while capturing a major share, we’ve introduced monthly beauty subscription boxes, a pillar in our value proposition, providing women with high-quality local alternatives that are affordable. Later on, in the year, we look forward to having further investors who support such initiatives to join us onboard, ” Lydia further said.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.