Cosmetic ingredient platform Novi gets $40 million in funding to expand service
The digital platform collects data on a variety of materials from many suppliers and analyzes what that information means for sustainability claims as well as retail and regulatory guidelines, primarily for beauty brands. Over six months, the company has raised $51 million from investors, led by $40 million in funds from Tiger Global.
Novi Connect founder Kimberly Shenk told CosmeticsDesign these investments will help the platform improve the supplier side of their service, launch new tools and expand into other industries.
Demand for concise sustainability information
When Novi launched in 2017, Shenk said sustainability could still be considered a trend, but that’s not true anymore.
“The thing we’ve learned over the past couple of years is that it’s a table stake and a major component and lever for brands in driving revenue and staying relevant,” Shenk said. “It’s not just a small indie thing, it’s something the entire industry is starting to embrace and adjust to meet these demands.”
While Tiger Global could not answer questions for this article, Griffin Schroeder, partner at Tiger Global, said in the press release for the investment that they were interested in the platform as a “unique data-driven” approach for businesses to use in creating sustainable products and packaging.
Novi Connect currently primarily serves beauty brands, but Shenk said they’ve seen interest in other types of consumer product companies, like household cleaning, vitamins, foods and other ingestible products.
For beauty brands, Novi is already able to compare ingredient, packaging and fragrance data with different sustainability guidelines, like that of Target and Sephora. Shenk said access to that data both helps brands meet those guidelines and develop new products more quickly.
“As we expand into other categories, we’re taking a lot of the learnings for how we've been driving sustainability in beauty and replicating that as a playbook to accelerate sustainability and other categories,” Shenk said.
Expanding services with investment
With the $40 million investment from Tiger Global, as well $11 million from venture capital firms Defy and Greylock, Shenk said Novi is hoping to expand their services twofold.
First, she said they will expand what kinds of companies Novi serves. The platform's original services focused on brands, but the company has seen demand for more services for suppliers. Shenk said they hope to add software that allows suppliers to list their materials and get more information about sales.
Right now Novi primarily allows brands to look up ingredients or materials, but Shenk said they’ve seen demand for a transactional side to the software which would allow brands and suppliers to do at least some extent of their business on Novi.
Additionally, Shenk said Novi hopes to expand what types of sustainability issues or guidelines the platform covers so more of the supply chain is addressed.
“As we start to expand, we can bring more and more of that ecosystem into the platform,” Shenk said. “That would allow brands to achieve any go-to-market standard that they have and keep up to date as the industry is changing.”