Fortune April 21, 2014
Two years ago, “stuff in a box” was all the rage among startups. The young and funded were hawking subscription memberships for coffee, razors, jewelry, sex toys, shoes, and booze. All of it seemed very faddish, and indeed, many of these startups have petered out. Those that have thrived have done so with a unique value proposition that can’t be matched by brick-and-mortar retailers, and more importantly, by Amazon.
One such company is Birchbox. The New York-based startup sells curated monthly boxes of beauty samples for $10 each, while offering full-sized versions of the products on its e-commerce site. In just 3.5 years, Birchbox has grown to 800,000 subscribers, which equates to $96 million in annual sales. Add to that the fact that 30% of the company’s revenue comes from sales of full-sized products, and Birchbox is making at least $125 million per year. (The company also makes money selling men’s boxes, but it hasn’t released subscriber numbers.) Birchbox has swelled to 250 employees and worked with 800 brands. All of that, with just $12 million in venture funding.
“We know what it means to grow quickly and not have to raise a lot of money, which isn’t always celebrated in our culture, but we have celebrated it here,” says Katia Beauchamp, co-CEO and co-founder of Birchbox.
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