If you wanted the perfect case study of a market ripe for disruption, the beauty industry would be it. Globally, the sector is worth $155 billion a year but one in two customers is unhappy with their purchases, points out Ming Zhao, the founder and CEO of PROVEN Skincare. “We are changing that by giving individual consumers the right products for their skin at the right time.”
It’s a promise that has seen customers flock to the company, which is now launching a $60 million fund-raising round under the Securities and Exchange Commission’s Regulation A regime. PROVEN ’s sales in 2019, the company’s launch year, came to less than $100,000. The figure rose to $10 million in 2020 and to more than $20 million during 2021.
Like so many of the best business ideas, PROVEN was inspired by its founder’s personal experiences. “I was working long hours away from home and I woke up one day and was just horrified by what I saw in the mirror – I looked like I’d lost my youth and my soul,” Zhao recalls. Purchases of expensive beauty products appeared to make no difference, but eventually Zhao met a beautician who took the time to find out more about her and recommend a tailored regime of skincare products. “It was transformational for me, and I just thought, ‘why is this not available to everyone?’,” Zhao says.
Zhao’s argument is that since everyone is different, it makes no sense to try to sell them all the same skincare and beauty products. “One size does not fit all,” she says. “The skin is the biggest organ of our bodies, yet it’s the only one for which we don’t personalise treatments.”
To fulfill her vision of putting that right, Zhao turned to “the smartest person I know”. She teamed up with Amy Yuan, a data scientist and an engineer with a background in computational physics. Together, they developed the Skin Genome Project, the world’s largest beauty database; it comprises tens of millions of data points, ranging from consumer reviews of skincare products to academic studies of the efficacy of key ingredients. “We’ve ingested the known universe of skincare knowledge,” Zhao explains.
On top of that, PROVEN has built an artificial intelligence tool capable of interrogating the database to work out what a skincare product needs to contain to suit a given individual, based on around 45 different criteria. These cover everything from a customer’s skin type and lifestyle to where they live and what time of year it is when they’re consulting the database. “Technology like this has never been applied in the consumer sector, let alone for beauty products,” Zhao says.
The net result of all this data crunching and AI tooling is the PROVEN value proposition. It asks new customers to complete a short questionnaire – Zhao says it will take around three minutes – and then works out the best possible combination of ingredients for their skincare needs. These are dispatched to the customer in three different products – a day moisturiser, a cleanser and a night cream.
“You’re getting the kind of personalised product that you would normally have to go to a professional dermatologist for,” Zhao says. “It’s a very simple questionnaire, but there is very sophisticated science sitting behind it.”
Each package of three products is priced at $129 and customers have the option of taking out a subscription to PROVEN , receiving regular shipments, or buying products as and when they need them. Either way, PROVEN can adjust each customer’s recipe of ingredients over time – as their lifestyle changes, perhaps, or simply because they now need protection from the winter weather.
Zhao is excited about the potential for growth and expansion, particularly with the additional financial firepower the company’s fundraising should bring it. PROVEN chose the SEC’s Regulation A route very specifically, conscious that this is one of the few ways for an American business to open up to retail investors as well as to the institutions that typically dominate such rounds. “We know who has built this company,” says Zhao. “Our success has come from our customers and our community, so we wanted to be able to repay their trust by enabling them to share in the growing value of the business.”
PROVEN ’s plans include moves into other beauty categories – it is already building similar databases to the Skin Genome Project in order to underpin the personalised approach in other areas of the beauty market. It is also pursuing international expansion; PROVEN began selling to Canadian consumers last year and is launching in the UK this month – its first venture beyond North America.
One striking feature of the business is its all-female management. “We started this business as strong and accomplished women who could see an obvious gap in the market for the products we wanted,” Zhao says. “We believe in empowering women across the spectrum – fewer than 30 female CEOs have ever taken a company public, so this investment opportunity marks a chance for women to make smart investment decisions, by women for women.”