In 2025, Investors No Longer Favor Beauty Brands

Recently, L’Oréal Group’s Minority Equity Investment In The Chinese Clean Skincare Brand LAN Attracted Widespread Attention Within The Industry. However, This Was The Only Publicly Disclosed Beauty Brand Financing Case Last Month, While Other Funded Companies Were All Upstream Raw Material Enterprises. For Instance, Giant Microbes, Which Just Announced Its A+ Round Investment Last Week, Is A Synthetic Biology Raw Material Manufacturer.

In Fact, Looking At A Longer Timeframe, From January To November This Year, Less Than 20% Of Beauty Enterprises Or Brands Received Financing, With The Majority Of Hot Money Flowing Into Upstream Raw Material Companies. This Reflects Significant Shifts Within The Industry Landscape.

According To Incomplete Statistics From Qingyan, Between January And November This Year, There Were 71 Financing, Merger, And Acquisition Events In China’s Cosmetics-Related Field. Among The Types Of Companies Invested In, Raw Material Enterprises Accounted For The Largest Number, With 43 Cases, Representing More Than 60.6%. This Clearly Shows That Upstream Raw Materials Have Become The Track Most Favored By Capital Markets.

In Contrast To The Popularity Of Upstream Enterprises, Domestic Beauty Brands Have Seen Relatively Little Investment This Year. Of The 71 Financing And M&A Events, Only 14 Involved Beauty Brand Companies, Accounting For Less Than 20%.

Specifically, From January To November, Beauty Brands That Received Financing Included Personal Care, Skincare, And Makeup Categories. Among Them, First Cover Youyi And Zhuzhan Each Completed Two Rounds Of Financing This Year.

Public Reports Show That First Cover Youyi Received A Hundred-Million-Yuan Angel Round Investment Led By Matrix Partners China In January. Later In April, Its Parent Company Wujiexing (Shanghai) Cosmetics Co., Ltd. Underwent Equity Changes, With Cathay Capital Consumer Co-Creation Fund Contributing RMB 157,000 And Acquiring 10.8% Of Shares, Becoming Its Third-Largest Shareholder.

First Cover Youyi Was Founded In 2024, Claiming To Be China’s First Functional Base Makeup Brand, Aiming To Break The Boundary Between Traditional Makeup And Skincare By Offering Products With Both Functions. It Is The Youngest Among The 14 Brands Or Enterprises That Received Financing.

Zhuzhan, Founded In 2020, Positions Itself As A Clean Beauty Brand. In May This Year, It Announced Completion Of Nearly RMB 100 Million In Series A And A+ Financing, With The A+ Round Led By S’Young Group And Co-Invested By Jiebai Consumer Fund.

Another Brand That Received Investment Is Corex, A Mid-To-High-End Anti-Aging Brand Established Less Than Two Years Ago. Upholding The Concept Of “Systematic Anti-Aging,” It Has Launched Product Lines Such As The Bright Series And Weaving Series.

In January, KK Group, A Leading Domestic Trendy Retail Enterprise, Became The Sixth-Largest Shareholder Of Corex’s Affiliated Company Hangzhou Yixiang Biotechnology Co., Ltd., Contributing RMB 588,200 And Holding 2.5% Of Shares.

The Oldest Among The Invested Brands Is Chando Group, Founded In 2001, Which Owns Brands Such As Chando, Maysu, And Spring Summer, And Is A Well-Known Domestic Beauty Group. On September 30 This Year, Chando Group Disclosed In Its Hong Kong IPO Prospectus That Cathay Capital And L’Oréal Group Invested More Than RMB 700 Million In Equity.

Overall, Functional Skincare Brands Still Dominate Among Those Receiving Financing This Year, Including Fuyumanpu, PMD Huanyan Leju, Oupelai, Corex, And LAN. Haircare Brands Included Only Zhufen, Yujian, And Siyu Industrial, While Makeup Brands Included First Cover Youyi, Zhuzhan, And Huazhixiao.

It Is Worth Noting That GREENLAB Was The Only Men’s Beauty Brand To Receive Investment This Year. Public Information Shows That In August, It Completed Nearly RMB 10 Million In Pre-A Financing From Hexiang Venture Capital, With Funds Intended For New Product Development, Mass Production, And Brand Building.

Founded In 2023, GREENLAB Launched Its First Product In June 2024. The Brand Positions Itself As A “Senseless Facial Grooming” Brand, Catering To “Refined But Lazy” Male Consumers. According To Qingyan Intelligence Data, GREENLAB Ranked First Among Men’s Makeup Brands In The First Half Of 2025 By GMV Market Share Across Major Online Channels. Its Pioneering “Original Repair Cream” Has Become Its Core Product.

Although The Financing Activity In China’s Beauty Sector Has Increased Compared To The Past Two Years (55 Cases In 2024 And 56 In 2023), Overall, Hot Money Continues To Flow Mainly Into Upstream Enterprises, With Relatively Few Cases Of Brand-Side Financing.

Beyond Raw Material And Brand Companies, A Few Channel Or Service Providers In The Beauty Industry Also Received Financing This Year, Such As Lanoxi, A Wholesale Supply Chain Provider Of Beauty Products; Haifeixiu, A Beauty Service Brand; And Aoyuan Meigu, A Technology, Materials, And Services Company In The Beauty And Health Industry.

From January To November 2025, Financing In The Beauty Sector Included Early-Stage Rounds Such As Seed, Angel, And Pre-A, As Well As Growth-Stage Rounds Like B+ And C, And Mature-Stage Investments Such As Strategic And Equity Financing.

This Indicates That Capital Is Systematically Deploying Across The Beauty Industry Chain, From R&D At Startups To Capacity Expansion At Mature Enterprises, With Funding Available At All Stages.

Of The 71 Financing Cases, 53 Disclosed Amounts. Among Them, 31 Were Below RMB 100 Million, Accounting For 43.1%, With Most In The Tens Of Millions.

Meanwhile, 15 Companies, Including Merck Germany, Jinbo Bio, Chando Group, Aoyuan Meigu, Liying Bio, Ruidelin, And InnoChem, Received Investments Exceeding RMB 100 Million, Accounting For 21.1%. Among Them, Global New Material International’s Approximately RMB 5.6 Billion Acquisition Of Merck Germany Was The Largest Raw Material Deal In China’s Beauty Sector This Year. Notably, During The Same Period Last Year (January To November), 15 Companies Also Received Investments Exceeding RMB 100 Million, Matching This Year’s Count.

Some Companies Received Investments Below RMB 10 Million, Such As Taiyuan Bio, Which Secured RMB 3.5 Million In Strategic Financing From Lafang Jahwa In April, And Andeputai, A Natural Products And Personal Care R&D Platform, Which Received RMB 5 Million In Equity Financing From Bavi Co.

Interestingly, These Two Cases Also Suggest That Some Capable Beauty Brands And Factories Are Extending Their Investment Reach Into Upstream Raw Materials.

Among Upstream Enterprises Receiving Investment, Those With Strong Capabilities In Functional Raw Material R&D And Production Remain The Focus Of Capital.

For Example, Jin San Bio, Which Received RMB 100 Million In April, Specializes In Producing High-Purity Ergothioneine And Is A Leading Global Supplier Of This Antioxidant Active Ingredient. Ergothioneine Is Primarily Used In Cosmetics As An Antioxidant, With Anti-Aging And Whitening Effects.

In October, Jiangsu Meishangjie Bio Announced Completion Of Its A+ Round Financing. The Company Focuses On Anti-Aging Skincare R&D And Has Established Multiple Brands, Including Hospital-End Brand Youbeiruikang, Medical Beauty Sub-Brand Yikemei, And Skincare Sub-Brand Anjishi. It Has Also Collaborated With Well-Known Beauty Brands To Apply Mussel Adhesive Protein In Skin, Mucosa, And Melanin Treatments.

Although Upstream Raw Material Companies Were Once Weaker In The Industry Chain And Received Little Attention From Capital Markets, In Recent Years, Growing Emphasis On Raw Material Innovation And Regulatory Changes Have Made Research-Strong Raw Material Enterprises Highly Attractive To Investors.

Synthetic Biology Remains One Of The Hottest Tracks In China’s Beauty Sector. Of The 43 Upstream Enterprises Financed Between January And November, 20 Were Involved In Synthetic Biology, Accounting For More Than 46.5%.

For Example, In November, Four Raw Material Financing Cases All Involved Synthetic Biology Companies: Giant Microbes, Huarong Bio, Xiushi Bio, And Zhonghe Gene.

The Youngest Among Them Is Giant Microbes, Founded On May 16, 2024. Public Information Shows It Was Jointly Established By Academician Chen Jian’s Team At Jiangnan University And Professor Jiao Jianhua’s Team At South China University Of Technology. It Is A Green Synthetic Biology Raw Material Manufacturer Focusing On Bioactive Sugars, Providing Functional Innovative Raw Material Solutions For Beauty, Daily Chemicals, Functional Foods, And Medical Aesthetics.

Giant Microbes Mainly Focuses On Skin Microecology Research, With Products Including Ultra-Low Molecular Weight Hyaluronic Acid, Galacto G Yeast Fermentation Filtrate, And New Maltotetraose. The Company Has Already Partnered With Brands Such As Dr. Aier, Marubi, And Fu’erjia.

Before Its A+ Round Financing, Giant Microbes Had Already Completed Two Rounds Of Financing Totaling Tens Of Millions Of Yuan In November Last Year. In Just A Year And A Half Since Its Founding, It Has Secured Three Rounds Of Investment.

Meanwhile, Companies Such As Ruidelin, Meishangjie Bio, Veminsyn, Zhino Tech, Junhemeng, Yisite Bio, And Juyuan Bio Also Received Investments Ranging From Tens Of Millions To Nearly RMB 100 Million This Year.

Among These, Ruidelin Received The Largest Financing Amount. Public Reports Show That In February, It Completed Over RMB 500 Million In Financing From Investors Including Songhe Capital, Cornerstone Capital, Changde Xingxin, Baiyin Keken, And Changde Deyuan. Founded In 2017, Ruidelin Was Among The Earliest Synthetic Biology Companies To Apply AI Technology To Enzyme Engineering And Has Achieved Scaled Production Of Peptide Raw Materials Such As Glutathione, Carnosine, And Semaglutide.

It Is Evident That In Recent Years, Synthetic Biology’s Participation In The Cosmetics Industry Has Increased Significantly. For Instance, Recombinant Collagen, Astaxanthin, Resveratrol, Glycosides, Squalane, Ethanol, Butanol, Glycerol, And Organic Acids Are All Cosmetic Ingredients That Synthetic Biology Can Develop. With Advantages Such As Overcoming Biological Raw Material Constraints, Accelerating Production Efficiency, And Environmental Friendliness, Synthetic Biology Companies Have Become A New Focus Favored By The Cosmetics Industry.

It Is Worth Mentioning That Some Synthetic Biology Enterprises Also Secured Two Rounds Of Financing This Year. For Example, Veminsyn, Founded In 2022, Announced Completion Of Strategic Financing And B+ Round Financing In May And September Respectively, With Investors Including L’Oréal Group, Nice Group, Huatai Jinsrui, And Haibang Investment.

According To Public Reports, Veminsyn Has Successfully Developed “Time-Col17,” The First Type XVII Collagen Peptide Raw Material To Be Included In PCPC, Which Has Achieved Mass Production And Been Applied To Products Of Multiple Beauty Brands.

There Is No Doubt That Synthetic Biology Is One Of The Hottest Tracks In Recent Years, Garnering Strong Attention From Governments, Academia, Industry, And Capital Circles Worldwide. In The Beauty Field, Chen Jian Has Publicly Stated That “Synthetic Biology In The Cosmetics Field Should Be The Easiest And Fastest To Implement.”

It Can Be Said That Raw Material-Side Technological Innovation Represented By Synthetic Biology Is Becoming A Key Driver Of The Beauty Industry’s Upgrading. Therefore, Many Enterprises Focusing On “Synthetic Biology” Have Attracted Considerable Capital Favor.

As A Result, Unlike The Cooling Investment Climate For Beauty Brands, Upstream Raw Material Enterprises Are Experiencing A Booming Financing Environment—With Synthetic Biology Leading The Charge. Amid This “Ice And Fire” Dichotomy, It Is Clear That Capital Is Shifting From Chasing Short-Term Traffic Dividends To Betting On Long-Term Technological Dividends.

Experienced Industry Professionals Believe That In Previous Years, The “Capital Plus Traffic” Playbook Could Rapidly Support A Brand In A Short Period, But Waves Of New Brands Formed Under Capital’s Embrace Often Collapsed Quickly After Harvesting A Round Of Dividends. Consequently, Capital At Present Places Greater Emphasis On Upstream Enterprises With Strong Research Capabilities.

Overall, Investment In The Beauty Sector Has Become More Rational And Calm, Returning To The Essence Of Research Strength, Innovation Capability, And Corporate Potential. Driven By This Direction, The Beauty Industry May Enter A New Stage That Is More Mature, Rational, And Focused On Hard-Power Development.