Source Beauty — the first and leading Egyptian-based beauty platform — received a commitment of up to $5m from the Egyptian Company for Cosmetics (ECC) in return for a majority stake in the business.
ECC is one of the leading beauty and personal care manufacturers in Egypt and provides a substantial opportunity to offer an enhanced service to Source Beauty’s clients, including new product innovation and manufacturing know-how.
It is worth nothing that Lorax Capital Partners recently acquired a significant minority stake in ECC and is supporting the company’s expansion plans. The group offers 360-degree services in manufacturing and distributing scientifically proven innovative cosmetic products in the country.
Lydia Schoonderbeek — Founder and CEO of Source Beauty — will continue in her role as CEO in addition to assuming the role of CCO of ECC.
“The funds will reinforce an accelerated digital and physical marketing strategy to reach a broader customer base, enhancing customer retention and brand visibility, as well as expanding the team,” Lydia commented.
“This strategic investment by ECC is a game changer for Source Beauty, and we’re all hugely excited about the future. Since Source Beauty’s inception, I have been determined to change the beauty space in Egypt to truly address the needs of the Egyptian consumer.”
Launched in 2018, Source Beauty is a women-led one-stop-shop with over 85 local and international beauty brands and 60,000 users. This marketplace provides customers with an affordable and available solution to beauty products in the country and exposes them to products sourced from the best raw materials by female start-ups. It also provides established and emerging brands with the most incredible interactive shop window.
The beauty industry in Egypt is growing exponentially and is expected to reach a market volume of $187.70m by 2025. Factors such as increasing customs on international beauty products and the high demand for variety has made customers less dependent on imported beauty products, giving way to local manufacturers. There is therefore a profound need to promote inclusivity, sustainability, availability, and affordability for the average Egyptian beauty consumer.
“We will continue to develop and work towards becoming Egypt’s largest multi-brand online beauty retailer. We are confident that this partnership with ECC will get us there,” Lydia added.
For his part, Mohamed Salah — Co-Founder and CEO of ECC — commented: “We are excited about Source Beauty’s role as part of the group and are equally excited about working with Lydia and her team to continue their journey in a market that is price sensitive and seeks sustainability.”
Furthermore, Ahmed Abu Al-Hamail — Co-Founder and Vice-Chairperson of ECC — added: “Source Beauty’s brand and company values make it a great fit for us. We are delighted to back Lydia and believe that her continued role at Source Beauty, as well as her new role at ECC complement the new chapter we are building for the group.”
Al-Tamimi and HVK Stevens advised ECC as local and international counsel for this transaction. Meanwhile, Van Campen Liem advised Source Beauty.