L’Oréal will work with incubator Founders Factory to become its partner for investments in beauty tech startups as the cosmetics business looks to setup the right arm’s length approach to innovation.
The world’s biggest cosmetics company is all too aware of the challenges to drive material innovation and its latest venture aims to help solve two of the most complicated – talent and executive level support from both start-up and brand.
Both have already been explored to some extent via the company's own technology incubator in San Francisco which has spawned a several innovations including a virtual make-up coach Makeup Genius. Now, under the new partnership, L’Oréal and Founders Factory will invest and grow five early stage startups and co-create two new companies from scratch every year.
The in-house team at Founders Factory will provide support on everything from product to marketing, legal and corporate as well as working alongside L’Oréal to nurture and launch new businesses and services. It purports to be different to other accelerators becuase of its access to a network of 1,500 entrepreneurs and corporate partners, meaning products and services are rooted in business strategy.
Lubomira Rochet, chief digital officer and member of L’Oréal’s executive committee, said the investment will give the business direct access to a "powerful global ecosystem of exciting startups and innovative technologies" to better serve consumer needs”.
“Leveraging the Founders Factory’s ecosystem and experienced entrepreneurs in residence, L’Oréal will provide significant contribution to the development of incubated companies in the beauty sector by bringing our knowledge of the beauty industry, the beauty consumer and our marketing and innovation expertise in all beauty categories,” she continued.
Under the agreement L’Oréal will be part of the Founders Factory board of directors represented by Rochet. Three L’Oréal executives will also hold seats on the beauty sector committee of Founders Factory.
The direct involvement of three executives from L’Oréal reflects how the company is starting to see innovation as a growth driver. Marketers have previously stressed the need for senior executives to buy into innovation or else it will continue to be side-project that contributes little to the overall business. It’s not an easy environment to create but one that is fundamental to success as can be seen in the way Unilever, Visa amongst others benefit from startups.