Glossier has emerged from the pandemic with its eyes set on retail expansion. In order to get there, the beauty brand has shored up more capital. A new $80 million investment values the company at $1.8 billion post-money, sources confirmed to The Business of Fashion. The round was led by Kelly Granat at Lone Pine Capital, which has also invested in Sweetgreen and Farfetch. Forerunner Ventures, Index Ventures, IVP, Sequoia Capital and Thrive Capital, each of which are existing investors, also participated in the round. The company also secured a debt facility from JP Morgan.

The funding round comes off the heels of two recent announcements in June. First, Alexandra Weiss, who had been with the company since 2015, was promoted to chief marketing officer after serving as the senior vice president of marketing. Glossier then announced a return and expansion of its physical retail presence after shuttering locations during the pandemic, which a cash infusion will help fuel.

Glossier had raised $186 million in funding as of March 2019, after closing a $100 Series D that more than tripled its valuation to $1.2 billion. A Series E worth $83 million brings the total amount raised to $266 million.

Glossier declined to comment.

The new round will be used to build out the brand’s retail network, which Emily Weiss, Glossier’s founder and chief executive officer, described as a “city-by-city” approach in a previous interview. Tailoring stores per city is a way to “activate the local community,” she said. For instance, a previous pop-up in Boston was made of “campuses” as an ode to the universities in the area. It’s worked so far: the brand sees lifts in online sales in the regions surrounding a store or offline activation.

The brand is relaunching retail in August, starting with a sprawling mushroom-themed $4,500-square foot door in Seattle. It’s the first of several stores set to open across the US and globally over the next few years. Last year, Glossier permanently shut its New York and Los Angeles flagship locations last summer to regroup on a post-pandemic retail strategy.

Despite the investment in brick-and-mortar, it’s e-commerce that drives the business: currently, 80 percent of the brand’s revenue comes from its own site.

“Glossier should have benefited a lot from lockdown and the past 18 months. We’ve seen traditional brick and mortar companies go from 20 percent digitally penetrated to 35 or 40 percent,” said Michael Felice, principal at Kearney’s consumer and media practice. “A mostly digital company is going to have capitalised on that shift of market capital over from brick and mortar.”

But while Glossier saw e-commerce growth across all categories (skin care, makeup, fragrance and body), there have been a few bumps.

Play, a bolder colour cosmetics line Glossier debuted around the time of its Series D, was a flop. Just under a year after it launched in 2019, the company said it would be winding down the collection of glitter gel and highly pigmented lip lacquers. The brand hunkered down on its core offerings of affordable skin-care and “no-makeup makeup” — what its Gen-Z clientele likes best.

Glossier is also now starting from scratch with physical retail. Last summer, the brand decided not to reopen its stores, which had been social media content bait for the customers willing to wait in line to get inside. Luckily, because the vast majority of the business comes from its site, unlike traditional beauty retailers like Sephora and Ulta Beauty, the hit wasn’t as severe as it might have been.

“The 2019 price jump was largely driven by strong performance, but also the promise of Glossier’s second brand, Play,” said a partner at a venture capital fund who requested anonymity and is not a Glossier investor. “The small bump in valuation seems to be directly tied to Play’s lacklustre performance, as well as the hit to Glossier stores during the pandemic.”

Analysts aren’t worried about a deceleration in the brand’s valuation, which went from $1.2 billion at the close of its Series D round to $1.8 billion today. It’s a smaller increase than the brand has experienced previously (a tripling in value from 2018 to 2019), but it’s to be expected when a company reaches this size.

“Eighty million isn’t incredibly large if they’re looking to launch in even 10 cities. I wouldn’t be shocked if they went for a little more [funding] in the future as they scale,” Felice said. “If they go for more and get it at a higher valuation that’s a great sign because it means the model is working. It doesn’t necessarily mean they need the capital to support the current operations.”

Glossier’s future remains a hot topic in the beauty industry, with people speculating about an eventual acquisition or an initial public offering. Some say the company is too expensive to buy; others say going public too early (and having to report quarterly earnings) is shortsighted and could hinder the execution of retail plans and a healthy bottom line in growth.

Felice doesn’t think Glossier would have trouble finding a buyer, despite its nearly $2 billion price tag, but there’s another path forward: continuing to scale independently. It’s a risk, he noted, but if the new retail strategy works, Glossier could follow in the footsteps of Warby Parker, one of very few digitally native brands to branch out into brick and mortar and successfully scale.

Editor’s Note: A previous version of this story indicated Glossier raised $269 million to date. That is incorrect. The brand has raised $266 million to date, including its Series E round.

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