Ulta Beauty Launches Digital Innovation Fund, Prisma Ventures
Ulta Beauty has become the latest retailer to launch a venture capital arm after announcing a new digital innovation fund Wednesday. The fund, called Prisma Ventures, earmarks $20 million for digital innovation in beauty, according to a company press release. The fund will invest in emerging technology startups that "seek to shape future online and in-store experiences by unlocking new technology that fuels greater discovery, personalization and convenience." That includes partnering with early-stage startups that are primarily Series Seed and Series A technology companies within four "innovation" pillars:
- personalized and data-driven technology;
- augmented reality, virtual reality and the metaverse;
- technology-powered custom beauty products and in-store services; and
- social commerce.
"We set out to build lasting relationships with startups, welcoming them into our ecosystem, co-creating and experimenting in ways that tap each other’s expertise and ultimately leverage our resources to imagine — and reimagine — what’s next for retail and beauty," said Ulta's Chief Digital Officer Prama Bhatt.
Total Retail's Take: Ulta unofficially launched Prisma Ventures in 2021 during the company's investor day. Since then, the beauty retailer has partnered with and invested in a variety of startup businesses, including Haut.ai, Adeptmind, Revea, LUUM, and Restyle. To date, these investments have "enabled greater personalization and diagnosis within Ulta Beauty's digital skin and hair experiences," the company reported in its press release.
Ulta, which owns the largest chain of beauty stores in the U.S., joins a growing list of major beauty companies that have added a VC component or leaned into technology acquisitions recently. For example, L'Oreal Group acquired the AR beauty tech company Modiface in 2018, and its VC firm Bold has invested in a range of beauty-tech startups.
And it's not just beauty companies launching VC arms. The Home Depot and Chipotle also both announced funds this year. The growing trend shows retailers are interested in investing in startups to improve digital capabilities, stand out from the competition, and infuse innovation into their business practices.
