When try-before-you-buy beauty subscription start-up Rubybox received funding from venture capitalist Hasso Plattner Ventures Africa it was a start-up dream come true.
As part of the investment, Rubybox – which was launched in 2011 by Sylvia Gruber and Margaux Knuppe – acquired a major competitor in the beauty box market, making it the dominant online cosmetic and beauty product retailer in South Africa. Gruber explains how they got the cash and what they’ve done with it.
“Try-discover-buy – that’s the rubybox.co.za business model. It incorporates a monthly payable subscription box of beauty samples and trial sizes of top beauty brands, an online beauty magazine and strong social media content for discovery, and an e-commerce platform that lets subscribers buy the products they love online. Our strong loyalty programme also attracts our audience to shop with us.
“Margaux and I funded Rubybox ourselves for a year, developing the subscription element and the online content. But we always knew that we needed substantial funding to really enable the ecommerce aspect of the business model – to make this work, we needed to buy inventory and be able to hold onto it, which is not only expensive, but it also results in more complexity in your operations.
“What we got right was to prove the model and establish a strong subscriber base and brand presence before seeking out venture capital to fund the next stage.”
”We wrote a strong three-year financial plan, created a compelling pitch deck and approached several venture capitalists and corporates. Hasso Plattner Ventures Africa was not initially on our horizon as we were advised that they don’t invest in B2C e-commerce ventures and that our business was too far removed from its investment mandate. Ironically, that’s exactly why the company invested in us in the end.
“What they invested in was us, our team, and our ability to execute. Our biggest advantage was that we could show a good track record, a focused plan, and determination.
“With that investment we have strongly positioned ourselves as the leading online beauty destination. Our e-commerce model has exceeded our initial expectations and forecasts and we have started our own Private Label Production which is gaining traction among our consumers (‘rubies’) and which we will extend.
“My advice to other start-ups? Plan to take around six months to secure funding. Have a proper proof of concept (even if it’s not in a real world environment yet, you need to have done the market research and have the data). Critically, have a powerful pitch – the first impression is very important. “
- Players: Sylvia Gruber and Margaux Knuppe
- Company: Rubybox
- Est: 2011
- Contact: www.rubybox.co.za | +27 (0)86 134 0777