Private-Label Platform Blanka Raises $2M To Ease Brands’ Ability To Bring Products To Market
In 2020, Kaylee Astle launched a short-lived sunscreen brand called Goodnight Moon, which gave her a window into the struggles of nascent beauty brands that most consumers, let alone entrepreneurs prior to their entrance into beauty, don’t see. Before she made a single sale, she ran up against minimum order quantities of hundreds of units and warehousing costs that were difficult for her to swing.
“When I did order small batches, I had to store them somewhere in my apartment because I couldn’t afford to get a warehouse. Even once the brand was up and running, every time an order came through, I was dreading it because I had to label and ship it,” she recounts. “Needless to say, it was really painful and didn’t work, but that was the eureka moment for me that there was this huge movement happening in independent beauty. What if we actually built tech to help solve its problems?”
Together with longtime friend and software engineer Doug Long and husband and marketer Adam Chuntz, Astle, a former strategy and operations consultant at Deloitte and co-founder of technology talent pool startup MobSquad, poured about $20,000 into developing Blanka, a private-label beauty merchandise creation platform based in Vancouver, Canada, to solve the issues she faced at Goodnight Moon. It has no MOQs, a network of 20 to 50 suppliers to produce 300-plus vegan beauty products in North America, and the capacity to handle fulfillment and labeling. Leveraging the company’s tools and Shopify compatibility, a brand can swiftly have a product up for sale on its website and Blanka will ship it to customers upon purchase.
“The ability to launch and promote a brand, not just in beauty, but any brand, has become democratized in a lot of ways, but, at the same time, consumer expectations have increased. Things like quality, sustainability and fast shipping have become table stakes,” says Astle. “So, while anyone could launch a brand, unfortunately for independent beauty brands, meeting all of that criteria is challenging given working capital, inventory and fulfilment constraints, so Blanka changes the game for independent brands because we are taking care of sourcing, product and fulfillment.”
Drawing over 20,000 sign-ups since it went live in 2021, Blanka has closed a $2 million seed funding round led by Dundee Venture Capital, with participation from Storytime Capital, Disruption Ventures and individual investors, including Fatima Yusuf, previously director of commercial, ecosystem at Shopify, and Manica Blain, founder of Top Knot Ventures. Originally, it planned to raise $1.5 million and ended up having to turn investors away who wanted to join the seed round after it reached $2 million. In advance of seed capital, Blanka obtained almost $400,000 in grants.
“For me, Blanka was an attractive play in a category that I see lots of growth and upside in,” says Blain. “However, instead of having to bet on a specific beauty brand, which is what I typically do, through Blanka, I was able to invest in a platform that will fuel and power many of the brands and creators in beauty that are resource-constrained and looking for cost-effective ways to grow their product offerings, all while maintaining best-in-class quality and delivering the best experience to their consumers in a time-efficient manner.”
“Our vision is to enable anyone to launch their own business and democratize that by providing the tools to start and scale a product line.”
In a statement, Catherine Williams, partner at Dundee Venture Capital, said, “The beauty industry may be massive and well-established, but it is still shockingly disjointed and inefficient. Blanka is paving the way for the future of the industry. By dramatically reducing the barrier to entry for independent brands, Blanka is set to transform the landscape for consumers.”
The seed funding will be put toward boosting Blanka’s marketing, heightening the inclusiveness of its offering, extending its product repertoire into further categories and tweaking its tech to, among other improvements, streamline the product labeling process. Blanka began with makeup and branched skincare in the summer last year, cosmetics accessories at the end of 2022 and men’s products in the spring this year. Fragrance and haircare are on its merchandise roadmap.
“Our vision is to enable anyone to launch their own business and democratize that by providing the tools to start and scale a product line,” says Astle. “In line with that, we are exploring adjacent categories to beauty as well as starting to work with larger, more established brands looking to break into the beauty industry.”
She adds, “We are also looking at, now that we have this incredible foundation of products, how can we take it a step forward and really be at the forefront of new products? We are staying on top of new products and have strong communication with our suppliers to know what R&D they have in-house.”
Today, clear lip gloss, mascara and foundation are popular items for Blanka’s clients. The platform has no MOQs, but can manage as much as 5,000 units per stockkeeping unit. Although they can order hundreds of products, Astle finds the brands that limit their range of products to one to five tend to be particularly successful. She reasons, “They are able to tell a strong narrative about their brands and, from there, they are building a community, and that’s what’s really selling right now.”
Astle places Blanka’s customers in four buckets: entrepreneurs jumping into beauty, beauty professionals such as makeup artists and aestheticians, content creators and existing brands expanding into beauty. The entrepreneurial group is the largest. Blanka charges customers a monthly fee of $29 to $99, a one-time fee of $149 to $249 for branding products, and an undisclosed percentage of each item they order. The company estimates it can facilitate the launch of a brand in under an hour.
Using the hypothetical example of a $40 hand cream, Astle explains brands “come to Blanka and buy it from us for $10, and we have bought it from the supplier for $6. So, we have really healthy margins. We see the brands on our platform mark up on average 190% from the price they buy it from us at.”
Blanka’s revenues skyrocketed 330% between 2021 and 2022, and its goal is to lift revenues 300% this year. It projects it will be profitable by 2025 or early 2026. Another avenue Blanka is investigating to propel growth is going beyond private-label products to customize formulas. Astle says, “That’s going to become table stakes as personalization continues to become an important aspect of independent beauty.”