Peach & Lily’s Alicia Yoon On Her K-Beauty Company’s Deal With Sandbridge Capital And The Current Skincare Moment
If taking on an investor is akin to getting married, Peach & Lily founder Alicia Yoon swears the courtship is just as important as the “I do.”
Her K-Beauty company recently went to the altar with Sandbridge Capital, backer of Youth to the People and Ilia Beauty. The consumer brand-focused investment firm picked up a minority share in Peach & Lily, which has generated annual sales exceeding $30 million, for an undisclosed amount.
Yoon, a pioneer of the $400 million-plus K-Beauty market in the United States, is accustomed to investors wooing her. She’s been pursued by them since she founded Peach & Lily in 2012, first as an e-commerce platform before it broadened its business model to curate K-Beauty selections for a myriad of retailers such as Target, Bergdorf Goodman and CVS, and release its own brands Peach & Lily and Peach Slices.
The timing suited making a money match. “We didn’t need the capital per se, but we’re growing very rapidly, and it felt like the right moment to have a strategic partner,” Yoon told Beauty Independent. “This is our eighth year in the business and our first institutional partner. We wanted a strategic growth investment.”
Yoon elaborates that Sandbridge has followed Peach & Lily’s trajectory for a while and is “completely aligned” with the company’s long-term plans, including reaching $100 million in sales within a few years. She says, “We’ve been talking with Ken [Suslow, Sandbridge’s founding managing partner] for years. We developed a trusted relationship. It was organic and felt like the right fit.”
Sandbridge asked questions that were different from other investors vying for a piece of her business, explains Yoon, noting the firm didn’t inquire only about the balance sheet. “Beyond just capital, it was important for us to find someone aligned with our values,” she says. “They showed they are interested in building a long-lasting brand. It was an easy and seamless process because we had built the trust.”
Yoon recommends a lengthy familiarization period to forge that trust. She suggests, “Take the time to have conversations before you think it is time. Get to know them at a personal level. Allow them to follow your journey and know your goals to find a great partnership.”
“Get to know them at a personal level. Allow them to follow your journey and know your goals to find a great partnership.”
Yoon, a Harvard Business School graduate, believes there remains tremendous potential for skincare despite a prediction from The NPD Group’s vice president and beauty advisor Larissa Jensen that a slowdown in the segment is on the horizon. At Peach & Lily, Yoon hopes to stoke the fires with international development, education, improved in-store and online experiences, and product innovation. And that’s what brought her to Sandbridge.
In particular, Peach & Lily’s global reach is expected to accelerate with Sandbridge’s support. There has been substantial demand from international markets, reports Yoon, who prefers to go “big and deep” rather than spread Peach & Lily too thin in many markets and channels without high productivity. She says, “We’ve really kept our heads down because we’ve been growing fast in the U.S., but this will allow us to speed ups international expansion.”
Yoon is ramping up education, cultivating communities to share insights about products, and creating experiences with in-store activities, pop-ups and multimedia content. “We are planning larger-scale events in Ulta stores such as master classes,” she says. “When we talk to our community and get their insights, they want more of us bringing our brand to life.”
Yoon pledges to keep innovation flowing, and she frequently visits South Korea, still a hotbed for new beauty technologies and ingredients, to suss out what’s next in beauty. She doesn’t rule out extensions into other beauty- and wellness-related categories, even haircare. After all, she remarks skin runs from head to toe. “We see haircare not as just treating the strands, but the scalp,” says Yoon. “There are also opportunities in makeup. However, our core will always be skincare.”
Peach & Lily’s sales have at least doubled yearly, and Yoon shares over 65% of Peach & Lily’s revenue comes from repeat purchases, a figure high for the beauty industry. “You must be laser-focused on serving your community and delivering exactly what they want,” she says. “We do a lot of digital listening to get crisp data and insights, but you have to balance that with introducing new innovations because consumers can’t tell you what they want if it’s new and never seen before.”
Customization has been a big push for Peach & Lily. It currently offers personalized advice from aestheticians at no charge via its website. Yoon says, “People are more educated today and want information. We’ve gone beyond the shelfie to meet the consumer’s desire to understand how products work.” Yoon keenly grasps the hunger for tailored product recommendations. Her desire to transport K-Beauty to the U.S. stemmed from searching for products to address her eczema.
Suslow is confident Peach & Lily transcends borders and categories. “Alicia is already well on her way to building an incredibly authentic premium brand, artfully blending natural ingredients and efficacy with a refreshingly innovative and modern approach to K-Beauty,” he said in a statement. “We see an ideal opportunity with the Peach & Lily brand to strategically leverage Sandbridge’s global brand building capabilities in support of the company’s trusted beauty platform and exceptional pipeline of new product innovation.”