Money Matters

How A Single Mom Battling Breast Cancer Built Beauty Bakerie To A $5M Brand, Got Unilever To Invest

(Source: www.forbes.com)

Courtesy of Beauty Bakerie

In an era when few women get multi-million-dollar financings to expand their businesses, and even fewer black women do, Beauty Bakerie’s Cashmere Nicole is a standout. She stuck with her idea for a new lipstick brand and makeup company even as she battled breast cancer as a single mom. Now Beauty Bakerie has a cult following for its no-smudge liquid lipsticks, known as “lip whip,” that cost $20 a tube online and come in dozens of colors like honey and raspberry tiramisu. It is closing in on $5 million in revenue for the year, and counts Olympic gold medalist Gabby Douglas as a partner and consumer-goods giant Unilever as its lead investor in a recent $3 million seed round.

“Cashmere’s story is a story of resilience above anything else,” says Roderick Roberts, Beauty Bakerie’s chief financial officer and a long-time friend.

Back in 2011 when Cashmere Nicole Carillo (she uses Cashmere Nicole for business) founded Beauty Bakerie, she was struggling. She had known since childhood in South Bend, Indiana, that she wanted to do something creative, but when she got pregnant in high school, she wound up on welfare. But Nicole, now 33, had grit and determination, and put herself through college, and then nursing school, and started her business on the side. “This idea that I had for Beauty Bakerie seemed to keep me really busy,” she recalls. “I could conceptualize names of the business and product line names and it would keep me busy for hours on end.” The name she chose for the business was a nod to her love of cakes, candies and pastries.

She knew she wanted to give back, so she decided she would also use the nascent lipstick brand as a vehicle to raise breast cancer awareness – in part because she liked the color pink. The next year, Nicole found a lump in her breast and had it removed. There were more lumps, and some of them were cancerous. The doctors recommended a double mastectomy. Nicole underwent surgery, and kept working on Beauty Bakerie.

The company had a traditional matte lipstick at first, but Nicole worried about what was in the lipstick – and why it left a ring on whatever it touched – after going through breast cancer treatment. So she worked to make the products vegan, non-toxic and cruelty-free. And smudge-free. Allure dubbed it “the cockroach of lipsticks,” saying it could “probably outlast an apocalypse.”

Early on, her friends told her to create a crowdfunding campaign and tell her story as a breast cancer survivor, but she was hesitant. “I was kind of embarrassed by it, kind of ashamed. Who wants to be the person who is the sick person, the person who has the story. My friends were saying, ‘Hey, you should start an Indiegogo page, so you can raise money to take your brand to the next level.’ I prayed and prayed on it. All of a sudden, I was hearing God tell me to tell the story. I was like, ‘That is not what I am doing.’ I was just terrified of that.”

For the next two months, Nicole says, she fought the idea that she should tell her story, and go public with her struggles. “All of a sudden, I heard, ‘This isn’t about you. You need to tell the story. The scars don’t make you broken, they make you beautiful, and you need to move out of the way,’” she says. So she made the Indiegogo page, under the campaign name Broken Boobs, in an effort to raise $25,000 for the nascent beauty brand. The campaign in August 2013 raised just $570 from 20 backers.

While the funds were small, Nicole’s story on Indiegogo caught Beyoncé’s eye, and months after the campaign had ended, Nicole recalls, she heard that the singer wanted to feature her story online. In October 2014, as part of Breast Cancer Awareness month, Beyoncé put Nicole and Beauty Bakerie on her website, complete with a glamorous photo. “Now I’m convinced, ‘Oh, you’re pretty cool,’” Nicole says. “Having Beyoncé feature the story on the website added a level of credibility to the Beauty Bakerie brand overall. That put a fire under me like never before.”

It raised Nicole’s profile and spirits, but being on Beyoncé’s website didn’t immediately pump up sales enough for Nicole to quit her job as a nurse let alone hire anyone else to help. “I was juggling everything,” she recalls. “Some people drink or smoke, and some people work out. For me, in hindsight, it was working on Beauty Bakerie.”

In 2015, Nicole was running ads on Instagram, where many entrepreneurs were building direct-to-consumer businesses. But the makeup business is crowded with brands vying for consumer attention, and she wasn’t getting many customers. “I got discouraged, and my health started to act a little crazy, so I decided to take a break from Beauty Bakerie. In May of 2015, I said, ‘That’s it. I know I just spent $3,500 on a new website, but I’m sick and I’m tired and I’m at the hospital and I’m not seeing any returns and maybe I should just quit,’” she says. Then she remembered her promise to herself that she would work on the company for five years before giving up. She’d been at it for only four and a-half years. So instead of quitting, she decided to take a two-month break. When she came back, she started running Instagram ads again. “I spent some money and the ad didn’t do anything for me on Instagram again,” she says. “The next week, this was two weeks after coming back from my break, I spent the same money and it took off.”

The video advertisement itself was pretty simple. In it, a woman wearing red lipstick smudged her lips, and showed her two fingers going across her lips with nothing coming off. “She tugged at her lips pretty hard, and there was nothing. That was it,” Nicole says.

The response, however, was overwhelming. “The brand started to take over my home and my living room,” she says. “I had to give notice at my day job. I was getting off work at 5, and trying to pack orders and respond to all these inquiries.” She brought in Roberts, a former Army ranger and Harvard MBA who was working in finance, as the company’s chief financial officer – and second employee –  at the end of 2015. He tapped another friend, Michael Markham, as chief marketing officer, and then Nicholas Lara joined as chief logistics officer. The four set out to build the African American-owned makeup company together.

After four years of struggling, Beauty Bakerie revenue hit $475,000 in 2015. While sales grew quickly, Nicole and Roberts decided to keep expenses low and continue to bootstrap the company rather than take on debt or bring in equity – a decision that put the company in a good financial position when it did decide to bring in capital to expand. “That was just being efficient on products and being careful on inventory. We were very methodical getting to that point,” Roberts says.

Today, San Diego-based Beauty Bakerie has a team of 30 people, and its products are sold in more than 130 countries. It expects revenue to reach $5.4 million this year, up from $3.3 million last year. And it is profitable. Earlier this year, it launched a new line of lipsticks in collaboration with Olympic gold medalist Gabby Douglas, and it has continued to expand its product line beyond lipstick to include face oil, illuminator and eyebrow gel. All of Beauty Bakerie’s products are manufactured locally in southern California.

The brand is geared toward Millennials, with the majority of its online customers aged 18 to 24 and the vast majority under 34. Its beautifully curated Instagram feed (435,000 followers) features women of all races and ethnicities, while pink cupcakes float around on its website. “Most people view our brand and think there’s a skew from an ethnicity standpoint. Fifty-five percent of our customer base is Caucasian. When you are representative of different ethnicities, people assume you are only catering to those ethnicities. We are inclusive, and we do serve a broader market and that shows up in our customer base,” Roberts says.

In October, it garnered a $3 million seed investment led by Unilever Ventures, the investment arm of the consumer-products giant, with participation by 645 Ventures and Blue Consumer Capital. High-powered African-American executives including Kenneth Chenault, chief executive of American Express; William Lewis, managing director at Lazard; and Charles Phillips, chief executive of Infor also invested. “We had reached critical mass and the interest kept coming in and we had to keep some people out of the deal,” Roberts says. That investment, which closed on the investment platform CircleUp, also put Nicole among just a few handfuls of black women who have ever raised $1 million for their businesses. Anna Ohlsson-Baskerville, a director at Unilever Ventures, who led the investment in Beauty Bakerie, says that the brand’s “highly-engaged and inclusive Millennial customer base” was a draw. “Cashmere has succeeded in creating an authentic brand with a distinctive playful positioning,” she says.

Forbes estimates the company’s valuation at more than $15 million – a figure that would make Nicole a millionaire. “I said, ‘We are going to walk a financial tightrope, but it is going to pay off from a dilution standpoint,’” Roberts says. “And it did. We really minimized dilution in the round we raised.”

With the new funds, Beauty Bakerie is planning to expand rapidly, both by increasing its retailer presence and by amping up its marketing efforts. It is launching in QVC, first in the U.K. – with Nicole appearing there December 18 as part of the launch – and then, in the first half of next year, in the U.S. It is also rolling out its products at Forever 21’s new Riley Rose chain of beauty stores and at Middle Eastern retailer Wojooh. The company recently hired a new chief operating officer, Josanta Gray, formerly a brand manager at Creative Artists Agency, to help it expand.

For Nicole, a breast cancer survivor now helping her 16-year-old daughter prepare for college, the success of Beauty Bakerie remains something of a whirlwind. “It is just insane,” she says.  “It’s been a Cinderella, dream-come-true story to come from food stamps and Section 8 and daycare assistance to this.”

More Info: www.forbes.com

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