Promoting ‘open innovation’: LG H&H commits $3.7m in funding to seek long-term partnerships with K-beauty start-ups

According to a press statement, the firm said it contributed half of Mark-Solid One Beauty Intelligence Fund No.1 capital, making it a key investor.

The firm said it invested in this fund to “actively discover” high-growth indie brands and beauty startups, aiming to build a foundation for long-term partnerships.

It added that it aims to harness new growth drivers in areas such as digital marketing and beauty tech.

“We plan to drive rapid growth by systematically supporting each area, such as necessary funding, organisational management, marketing, and distribution at each stage of growth,” said the firm.

Through this, the company aims to broaden its access to innovative concepts and trends within the beauty industry by engaging in extended networking relationships with successful entrepreneurs.

By doing so, it hopes to gain insights and ideas that could drive its business forward.

The firm said it has been monitoring the overseas expansion of indie brands in markets such as the US, Japan, and the Middle East.

It was also seeking ways to corporate with such brands.

“As a leading K-beauty company, we will promote open innovation with start-ups and further contribute to the development of the entire K-beauty industry ecosystem.”

Last year, the company acquired a 75% stake in VivaWave, which owns the colour cosmetics brand Hince for KRW42.5bn (USD31.5m).

CosmeticsDesign-Asia reported that the firm acquired Hince to boost its colour capabilities and accelerate efforts to broaden its younger consumer base both locally and in Japan.

“With this acquisition, LG H&H will leverage hince’s differentiated colour development capabilities and strengthen our colour cosmetics portfolio. We will be launching new products with a diverse colour spectrum, focusing on the mood of each season and using this to foster LG H&H’s own colour brand.

“We also aim to expand business opportunities in the mid-range to high-end cosmetics categories, such as skin care, when the MZ generation have greater purchasing power in the future,” the firm said in a press statement.

In the same year, competitor Amorepacific acquired additional shares in COSRX, owning 93.2% in total and integrating it as a subsidiary.

In July, the firm announced its first-half results.

Its beauty portfolio, which consists of brands such as The Whoo, Su:m37, and Belif, recorded sales and operating profit growth of 1.3% and 3.6% respectively.

Fund background​

Mark-Solid One Beauty Intelligence Fund No.1 is a venture capital firm formed by startup investment companies Mark & ​​Company and Solid One Partners.

The fund evaluates startups based on the investment expertise of fund managers and beauty company data owned by Mark & ​​Company.

It also utilises an industry-specific data analysis system that tracks various factors such as traffic growth and repeat purchase rate before comparing it to industry benchmarks.