The young Chinese e-commerce cosmetics brand has received USD 100 million in Pre-IPO financing, just half a year after its Hillhouse-led Series C, which also saw Sequoia among the backers.
Perfect Diary's eye shadow products. Image credit: Perfect Diary
Tiger Global led Perfect Diary's latest strategic financing series of USD 100 million, with Hopu Investment (厚朴投资) and Boyu Capital (博裕资本) joining in. After the funding, the Chinese cosmetics brand's valuation was pumped to USD 2 billion.
Perfect Diary was founded in 2017 by Yatsen Global (逸仙电商), a Guangzhou-based e-commerce cosmetics company. Perfect Diary is now supported by a batch of big-name VCs, including but not limited to Zhen Fund (真格基金), Gaorong Capital (高榕资本), Sequoia China and Hillhouse Capital.
The founder Huang Jinfeng (黄锦峰) previously served P&G in a marketing position and was later COO at another Chinese cosmetics company UNIFON (御泥坊). His experience in marketing has contributed significantly to the growth of Perfect Diary. As an e-commerce cosmetics brand, Perfect Diary has made its name widespread within three years.
In this time, key opinion leaders (KOLs) in China have helped to generate a social phenomenon, known as the ‘KOL Economy.’ People familiar with cosmetics and KOLs will spontaneously relate to Jeffree Star and Pony Park. The two most successful mega KOLs in the world founded their own cosmetics brands, and have made these bestsellers using their influence. A similar story goes for Perfect Diary, except the founder is not a KOL in cosmetics. Instead, it caught a free ride on the ‘KOL Economy’ and built its fan community and brand stickiness.
Taking advantage of social media like WeChat and Xiaohongshu (小红书), Perfect Diary contracted with KOLs on these platforms to promote its products. With a few macro KOLs and celebrities and more mid- and micro-ones, the KOL pyramid helped to solid the brand and user-generated content (UGC) on these platforms spread the influence further.
Employing KOLs’ influence and pushed by UGC across different social media platforms, the cosmetics brand swiftly opened the market with quality products with fair prices and built connections with Gen Y and Z consumers in a short time. New marketing strategies have rocketed the brand's growth.
In 2019’s Double 11 shopping festival at Tmall, Perfect Diary defeated MAC, Estée Lauder, Lancôme and other brands, and was crowned the list of 'Top 10 Cosmetics Brands.' The estimated revenue of the young cosmetics firm in 2019 was nearly CNY 3 billion (USD 428 million).
Perfect Diary is riding high. The company plans to open 600 offline stores in 100 cities within three years. The expansion speed requires tons of cash to fuel it and the new funding will help it to accelerate. While receiving money from the private market, it is starting to plan for an IPO, according to a close source who asked to remain anonymous because the deal has not been made public.