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    Online Exclusives

    Hygiene Product Startups Gain Investors

    Investments will help expansion of newcomers in period care and baby care

    Hygiene Product Startups Gain Investors
    Photo: Planera
    Tara Olivo, associate editor06.30.22
    Startups in the absorbent hygiene products market continue to shake up the industry, and over the last few months several new brands offering feminine care and baby care products have received a boost from investors in order to help them expand into more retail stores, as well as launch new products.

    In May, Rael, a holistic personal care brand focused on clean period care, intimate care, and skincare, announced the close of a $35 million Series B investment. This investment represents the largest amount raised in the U.S. feminine care category to date and brings Rael's total funding to $59 million since the company was founded in 2017. The round was led by Colopl Next, the venture capital arm of Colopl, and Signite Partners, the corporate venture capital firm of Shinsegae Group, one of the largest conglomerates in Korea. The funding was also joined by Aarden Partners, ST Capital, and existing investors including Mirae Asset and Unilever Ventures.

    With this investment, Rael plans to continue its product innovation led by its development team based in South Korea, expand its 360-degree approach to women's wellness, accelerate growth at retail by expanding partnerships and investing in brand and trade marketing, and advancing its global expansion.

    "We've been very impressed by Rael's growth trajectory and strong customer loyalty and believe they're poised for exceptional growth as an innovator and disruptor in the wellness space," says Jeffery Lim, managing partner at Signite Partners. "We are excited to support Rael as it continues to scale its business and make holistic women's wellness a seamless and approachable experience for all women around the world."

    New brands like Rael entered the hygiene market by taking a cue from The Honest Company, which introduced a unique brand of baby diapers online in 2012, and saw a path to enter the market by partnering with contract manufacturers to develop products and launch online through direct-to-consumer channels. A decade later, the proliferation of new products continues to change the market as hygiene startups have chipped away at the retail space of some of the major brands in period care and baby diapers.

    “We have seen many new hygiene startup companies in the last few years, especially in the natural and premium/luxury market segments,” says Price Hanna, managing partner, Price Hanna Consultants. “Overall, the startup hygiene brands have contributed valuable insights into understanding current consumer wants and how to rapidly respond with their product designs. Hygiene leaders often follow the features of these specialty brands even to the point of acquiring a startup business, for example Procter & Gamble’s purchase of This is L.”

    According to Hanna, market entry barriers for these startups have been lowered significantly by e-commerce. “New hygiene companies can launch new products and sell delivery subscriptions on their websites,” she says. “Amazon enables rapid growth for new products that are supported by effective marketing on social media and their own websites.”

    Planera, a London, U.K.-based personal hygiene startup that created a flushable and biodegradable sanitary pad, recently received an investment from RH Capital, a leading women's health venture capital fund, in a move expected to positively impact the level of waste the industry produces and fails to dispose of each year.  

    Planera was founded in 2020 by CEO Olivia Ahn and engineer Aaron Koshy who were frustrated with companies forcing their responsibility of waste onto consumers – Planera believes that it is the companies’ responsibility to create disposables for use and disuse.

    “Planera was created as both myself and Aaron were immensely frustrated at the volume of landfill waste that sanitary pads generate each year,” Ahn says. “Corporations who produce hygiene products should be taking greater responsibility for how their products are disposed of – putting any hygiene waste in a bin is not the end of its impact on the environment. Sanitary pads are an essential part of people’s monthly healthcare routine - at Planera we are helping everyday be easier.”

    On the baby care side, Coterie received $23.8 million during its latest round of funding this month, led by Ben Bryce at Align Ventures. This brings the group’s total funding to $34 million including investments from Beliade, Willow Growth, River Park Ventures and model Ashley Graham.

    The funding will enable Coterie to not only double down on its mission, but also expand into new realms. “We’re intensely focused on innovation at the product level [by] developing uniquely cleaner and higher performing diapering solutions, the developmental journey with a stage-based approach to growth, and the unprecedented customer experience we provide to parents every single day [with] flexible subscription, text order management, and beyond,” explains Frank Yu, the company’s founder and CEO. “Our mission is to make parents’ lives easier, and we take a 360-degree approach to supporting parents in every step of their journey.”

    Hanna says today’s consumers love to try the new products they discover on social media, easily buy online and spread word of mouth recommendations to their circle of friends. But, it’s more difficult to build enduring brand equity among the segment of consumers who tend to focus on the ‘next new thing’ “As consumers return to retail stores, the new hygiene companies find that they need a consistent retail presence with major retailers as well as digit sales to maintain growth,” she adds. “The hygiene startups are also expanding their product portfolios to extend brand equity and support rapid growth. The recent financings completed by Rael, Coterie and Planera support this growth.”

    Bumpy Road Ahead

    While these brands will certainly get a lift from their recent investments, they are not immune to the supply chain challenges and inflationary pressures plaguing not just the hygiene market, but most industries around the world.

    Startups in particular have challenges that increase their product costs significantly compared to the hygiene category leaders, Hanna says. “Most startups require contract suppliers to manufacture their hygiene products. This typically requires transporting the product from another country, such as Mexico, Canada, China or a European country,” she explains. “Natural raw materials, especially cotton and rayon, are often imported from other countries. The costs of logistics and raw materials have been increased substantially due to supply chain disruptions and inflation in labor and materials. Smaller startup hygiene companies are more vulnerable to logistics cost increases than the leading manufacturers.”

    Additionally, U.S. retailers currently have some empty shelf spaces to fill with new products due to supply chain problems. “However,” Hanna continues, “the startups are finding it difficult to pursue this retail market opportunity since their supply chain problems may be more severe than the big brands, due to the more distant locations of their contract suppliers.” 
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