Hair Growth Brand Scandinavian Biolabs Secures Nearly $4.5M In Series A Funding To Accelerate Growth

Scandinavian Biolabs has closed a nearly $4.5 million series A funding round to grow the reach of its hair growth products in European countries and the United States.

The Copenhagen-based brand’s round was led by Auréa, the Paris-headquartered investment firm that recently rescued The Body Shop from administration and focuses on digitally native beauty, wellness and longevity brands. SevenVentures, the investment arm of German media company ProSiebenSat.1 Group specializing in media-for-equity deals, and Blazar Capital, the Danish venture studio that previously kicked in $1.3 million in pre-seed funding were also participants.

“It’s not easy to raise in the current environment, and it’s a validation that we have built something where the customer stays and is engaged,” says Scandinavian Biolabs CEO and co-founder Anders Reckendorff, ex-associate at Kearney. “We now have the possibility of investing in long-term initiatives that might not have an immediate return on investment, but will give us a competitive advantage in the future and deliver a better experience to the customer.”

Launched in 2020 after co-founder and COO Niels Konradi, formerly in financial project management at architecture and engineering consultancy Ramboll, battled hair loss in his 20s and was disappointed with the available options for it, Scandinavian Biolabs is on track to hit $12 million to $13 million in sales this year, up about 50% to 60% from roughly $8 million last year. Market research firm Grand View Research estimates the global hair growth supplement and treatment market will advance at a compound annual growth rate of 6.1% from 2024 to 2030. About half of women and 80% of men deal with hair loss during their lives.

Eighty percent of Scandinavian Biolabs purchases contain its hero product Bio-Pilixin Activation Serum, a $58 blend of 12 active ingredients like niacinamide, caffeine, vanillyl butyl ether and capilia longa. In contrast to finasteride and minoxidil, it’s a non-prescription cosmetic product. Additional Scandinavian Biolabs products are Hair Strength Shampoo, Hair Recovery Conditioner, Scalp Activation Derma Roller, Hair Styling Gel, Hair Hydration Mask, Sea Mineral Spray, Hair Protection Oil and Hair Nutrition Tablets.

“We now have the possibility of investing in long-term initiatives.”

“The end vision of Scandinavian Biolabs is to be the No. 1 functional haircare company,” says Reckendorff. “We are constantly working on new categories that haven’t been innovated in a long time where we can solve a problem. That could be gray hair or dandruff.”

Direct-to-consumer distribution is responsible for 80% of sales. Amazon and retail drive the remainder. Scandinavian Biolabs is in 50 European pharmacies such as John Bell & Croyden and retailers such as Flaconi and Helsam. In DTC, over 70% of new customers sign up for a subscription, and 50% of customers repurchase within a year. Core customers are aged 25 to 40 years old, and 60% are male.

For the past year, Reckendorff says the brand has been prioritizing expansion “with almost no cash burn, which has resulted in an average EBITDA [earnings before interest, taxes, depreciation and amortization] of just around 0%.” Going forward, it will continue to spend to accelerate expansion and expects to be profitable on an EBITDA basis in three years.

With support from SevenVentures, Scandinavian Biolabs is allocating about $3.4 million to advertising in 2024 and 2025, including on German television. More than 40% of its customers are from the United Kingdom, 20% are from Germany and the rest are primarily from other countries in Europe, notably Denmark. Outside Europe, it’s received a welcome reception in the U.S.

“The end vision of Scandinavian Biolabs is to be the No. 1 functional haircare company.”

Scandinavian Biolabs manufactures in Denmark and has 25 people on its team, 16 of which are in Copenhagen. A third co-founder is Christian Harboe, former head of commerce at home organization furniture company Erfa Inventar A/S and co-founder at snowboarding e-commerce store Blacksnow. He serves as chief growth officer.

Reckendorff shares Scandinavian Biolabs draws about 200,000 organic monthly visitors to its website and about 80,000 are from the U.S. It established a warehouse partnership in the U.S. last year to ship products to American customers. It plans to cultivate those customers via DTC for a year or two prior to entering U.S. retail through the pharmacy channel.

Scandinavian Biolabs is spending on clinical research on its serum formula to distinguish it in a market characterized by cosmetic products that rely on ingredient-level clinical studies. Due to be finalized next year, it’s commissioned a clinical study with 100-plus subjects to reaffirm findings it obtained from an earlier 150-day clinical study with 30 men and women aged 18 to 65 that showed 93% of users detected a decrease in hair loss and 73% of users detected an increase in hair density.

A big goal for Scandinavian Biolabs is to get 80% of its customers to use its serum for 150 days. Today, 20% to 25% of the brand’s customers stick with it for at least a year. Sticking with it is important to realize hair growth benefits, and Scandinavian Biolabs concentrates on education emphasizing consistent usage. It offers a 20-minute consultation to subscribers and a 150-day money-back guarantee to all customers.

“It is not like a mascara that you put on and there’s instant results. It takes a long time,” says Reckendorff. “We want to build a universe and community with our customers after they’ve joined. That requires a lot of effort in delivering information on any questions they might have.”