Skin is the largest organ in the body comprising approximately a total area of approximately 20 feet and serves as the body’s first line of protection. As the pandemic has lighted the importance of self-care and with people spending more time at home, the use of skincare products has increased; 40% of skincare users reporting using products more often than they did in 2019. Heyday is on a mission to make skincare more accessible. The startup operates a number of studios across the country that take the experience of getting a facial out of the spa and into more convenient locations. Rather than just focusing on facials, Heyday concentrates its efforts on building an educational experience for its user so that they can build an enduring skincare routine. This includes working with one of the company’s 300+ estheticians to develop tailored regiments. Also, available is a robust e-commerce store that offers a curated selection of vetted brands. While the pandemic restrictions limited in-store facials, Heyday used this time to build launch its franchise model to fuel its expansion and build out a franchisee operator training program.
AlleyWatch caught up with Cofounder and CEO Adam Ross to learn more about Heyday’s progress since we last spoke after its Series A round in 2018, challenges faced during the pandemic, expansion plans, and the latest round of funding, which brings the total equity funding raised to $31M.
Who were your investors and how much did you raise?
We closed a $20 million Series B Round led by Level 5 Capital Partners (L5) with participation from existing investors Lerer Hippeau and Fifth Wall Ventures.
Tell us about the product or service that Heyday offers.
Heyday is the fast-growing company making expert skincare accessible, empowering consumers with knowledge and tools to their best skin.
Licensed Skin Therapists work 1:1 online and offline to educate and match consumers with the routine and products best suited for their concerns. Powered by a fleet of retail touchpoints and a unique offline experience, Heyday is changing how we take care of our skin defining the future of the skincare industry for the modern consumer.
What inspired the start of Heyday?
We started Heyday to make expert skincare accessible. To cut through the noise and arm consumers with the knowledge they need to become an expert in not just skincare, but in their personal skin’s care. We started by taking the facial out of the spa and making it more accessible. That journey will continue on as we grow our on- and offline presence.
How is Heyday different?
We approach the world of skincare and facials very differently: we don’t start with products, we start with people. We are people-first skincare and take education very seriously, as actually teaching clients about their skin and how to best take care of it is important, which in turn drives results. Our Skin Therapists are the most important part of Heyday, as they make sure that client needs are catered to and that every client benefits from their expertise. We take skincare and facials to a very personal level.
What market does Heyday target and how big is it?
There is a massive opportunity to become the leader in an accelerated and high-growth category of skincare. Currently, skincare services are a $7B category while online products are a $100B category. We were shocked to realize the lack of innovation in such a fast growth category, central to peoples’ daily routine, and that there was no one trusted skincare brand that was educating and informing a client on their personal skincare routine.
We have an incredible statistic that 25% of clients who have visited Heyday for a facial, had never had this service before. This proves that not only are we increasing our market share, but we are creatively innovating and introducing new clients to the category.
What’s your business model?
Heyday’s omnichannel business model is designed to modernize how skincare services and products are delivered to consumers, making them more widely available through virtual experiences, e-comm, local shops powered by franchisees, and expert-driven skincare products. With this raise, Heyday has the opportunity to create an even wider business model with support of franchise expansion.
A central pillar to our business model is accessibility to professional experts (our estheticians), skincare content, and education, all at affordable prices. Our overall mission is to democratize skincare. By pairing thoughtful and personalized services with leading products we are able to empower clients to have the best skin possible and feel in charge of their routine.
How has COVID-19 impacted the business?
At the start of the pandemic (mid-March) we had to close our fleet of shops and furlough our team given to shutdowns in New York, Pennsylvania, and California. As soon as we were legally allowed to reopen in the states we operate, we offered employment back to all of our estheticians and shop team members who were ready to return.
The COVID-19 restrictions that we are operating in the latter part of 2020 have forced us to be more creative in how we are working together to create world-class training foundations for our franchise partners. It takes greater coordination and communication but we’ve found a pathway to overcome that absence of being together in one office.
What was the funding process like?
Heyday’s overall funding process began in November 2017, with seed funding of $3 million led by Lerer Hippeau and in November 2018 raised a Series A funding round of $8 million led by Fifth Wall Ventures.
This month, we closed a Series B, led by Level 5 Capital Partners (L5), with participation from existing investors Lerer Hippeau and Fifth Wall Ventures, that will lead the brand’s development and expansion of Heyday franchise efforts.
What are the biggest challenges that you faced while raising capital?
One challenge was carefully auditing and vetting the space for potential investors that were driven by long-term goals. We had a ~4-month process where we took the time to meet investors and close this round, while also balancing the pandemic and the Q4 holiday season. Personally, for me, the most difficult challenge was managing the raise and doing my day job – essentially two full-time jobs that stretched my limits. Some days proved to be overwhelming but I am thrilled to be on the opposite side and be able to get back to my role in the business.
What factors about your business led your investors to write the check?
Our investors share our vision and strongly believe that the demand for high-touch, personalized service experiences will be stronger than ever post the pandemic. With a focus on self-care, consumers will continue to invest in services that help them feel and look better. Our investors see Heyday as being the most trusted skincare brand across the US. What Peloton is to cycling, Sweetgreen is to salad, Warby Parker is to eyewear, Heyday will be to skincare.
I believe that our investors were also pleasantly surprised by the whitespace that we have identified within such a fast-growing category. Due to the pandemic, skincare has proven accelerated growth, yet there is still no one trusted brand within the category. We have competitive moats in our shops, our team of expert estheticians, and our data to personalize skincare in a way that no other brand can, creating multiple pockets and channels for growth in both services and products.
What are the milestones you plan to achieve in the next six months?
There’s no doubt the next six months are going to be challenging. However, this allows us to prepare our strategic plan now, making the necessary investments in our team, technology, and marketing strategy. We will have a critical foundation developed to accelerate the back half of 2021. Most importantly, set ourselves up for a breakout 2022.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
My advice would be to focus on fewer, yet better, initiatives with clear goals and results. As an entrepreneur it’s tempting to always say “yes”, but in the current environment, focus is your friend. It will help you demonstrate results that investors will more easily be able to extrapolate, and hence fund you. In addition, this approach should help you to better manage the cost side of the business to give you more breathing room.
My advice would be to focus on fewer, yet better, initiatives with clear goals and results. As an entrepreneur it’s tempting to always say “yes”, but in the current environment, focus is your friend. It will help you demonstrate results that investors will more easily be able to extrapolate, and hence fund you. In addition, this approach should help you to better manage the cost side of the business to give you more breathing room.
What’s your favorite outdoor dining restaurant in NYC
In winter, and as someone who doesn’t function well below 60 degrees, I don’t have an obvious go-to, but in the warmer months, it would be the Grand Banks. Lobster rolls and rose on a boat with friends are tough to beat!
