The Moneyed Mayvenn: Essence Ventures Leads A $23M Series B Round To Grow The Hair Extension Business
Middlemen remain powerful even in an age in which they’re often disparaged.
Take Mayvenn Inc., the wig and hair extension startup that’s snagged a $23 million round of Series B funding led by Essence Ventures with participation from Impact America Fund, a16z and Cross Culture Ventures. It launched in 2013 after co-founder and CEO Diishan Imira, who was selling human hair from China to Americans, noticed that the hairstylists performing wig and extension services were losing out on revenues from wig and hair extension offerings to nearby beauty supply stores carrying them.
“95% of black hair salons don’t realize any product sales, and one of the reasons is they don’t have inventory. We import all the products and give hairstylists their own websites to sell these products. We ship products directly to the salon and pay the stylist a commission on everything she sells,” says Imira. “We have built the company that way. We over 50,000 hairstylists across the country, and we’ve paid out over $20 million in commissions to them.”
With its connections to hairstylists multiplying, Mayvenn has become increasingly known in consumer circles for its wigs and extensions. Now, the company is moving to take advantage of its growing name recognition by amplifying its consumer-facing focus with a program pairing consumers with hairstylists providing free services to them if they buy three bundles or more of Mayvenn’s products.
“95% of black hair salons don’t realize any product sales, and one of the reasons is they don’t have inventory. We import all the products and give hairstylists their own websites to sell these products. We ship products directly to the salon and pay the stylist a commission on everything she sells.”
“We’re still in the business of selling the hair, we’ve just reduced the price of the all-in experience of buying the hair and getting services 40% to 50%, depending on what people normally pay to get their hair done,” says Imira. “It’s a way better deal for consumers. Currently, the cheapest place where people can buy hair is AliExpress. Those products tend to be poor quality, and you have to pay to get them installed. With Mayvenn, you’ll be able to get the all-in experience – hair plus service – cheaper than AliExpress.”
Imira predicts Mayvenn’s consumer-facing component will be a “huge” portion of its sales. Along with its all-inclusive initiative, Mayvenn is rolling out 27 new wig options in January. Imira details the wigs are designed to reflect various personalities because women use wigs to experiment with different personalities or sides of themselves. Mayvenn’s hair extensions outsell its wigs, but Imira notes the popularity of wigs is climbing. Over the past five years, the company has generated $80 million in revenues. Asked about profitability, Imira responds, “We are investing heavily into the future and the growth of the company.”
Imira never thought he’d be in the hair industry. Following a post-college stint in China teaching English, he began importing goods from the country to the U.S. and hawking them on Craigslist. “Someone asked me if I could get hair extensions from China, and I did. I ended up selling hair to a bunch of hairstylists out of the trunk of my car to make money. The more I did that and the deeper I got into this business, I saw an opportunity to do something really big,” recounts Imira. He’s not the only person spotting the opportunity. A member of a 2013 class at accelerator 500 Startups, Mayvenn has amassed a total of $36 million in funding, and among its backers are Serena Williams, Jimmy Iovine and Andre Iguodala.
“As we build out the network of stylists and increase their frequency of selling our core products, we will add more products that are both Mayvenn brand products and products from really high quality partner brands that our customers are looking for.”
Much of the capital from Mayvenn’s latest round of fundraising will be put toward marketing efforts to lift consumer awareness. Imira mentions it will rev up content creation, and hit the event circuit hard with stops at Beautycon, Essence Festival and other events. Oakland, Calif.-based Mayvenn is expected to shore up its staff, currently sitting at 55 people, to support the consumer marketing push.
As it hones its brand voice to appeal to consumers, Richelieu Dennis, CEO of Essence Ventures and Sundial Brands, owner of Shea Moisture, Nubian Heritage and Madam C.J. Walker, is a welcome addition to Mayvenn’s board. Mike Smith, COO of Stitch Fix, has also joined the board, and Stephen Lasky, former CFO of Madison Reed, has been appointed Mayvenn’s CFO. Taylor Wang, formerly CEO of Group Swoop LLC, started Mayvenn with Imira and serves as its COO.
Prior to finalizing the Series B round, Imira developed a relationship with Dennis over the last year-and-a-half. The two had been talking about potential synergies between their businesses, and Imira reports Sundial products are going to be introduced to hairstylists via Mayvenn’s platform. He elaborates, “As we build out the network of stylists and increase their frequency of selling our core products, we will add more products that are both Mayvenn brand products and products from really high quality partner brands that our customers are looking for.”
Dennis and Imira share a commitment to fostering economic empowerment in underserved communities. Imira underscores Mayvenn is intent on assisting black hairstylists to improve their incomes. “In the near future, we would like to create educational tools to help them further their craft, learn about their business, and make more money doing what they love,” he says. “There is a big hunger for that, and you can see that online. There are more and more stylists searching for educational tools and tips.”