Subtl Raises $5.5M In Series A Funding To Make It Easy For Time-Pressed Women To Do Their Makeup On The Go

Subtl, a makeup brand known for stackable products that on-the-go women can effortlessly slip into their purse or gym bag, has stacked up nearly $5.5 million in series A funding.

More specifically, the round involves $5 million from Cult Capital, backer of scalp care brand Act+Acre and clean cosmetics brand Lawless, and slightly under $500,000 from returning investors Grouse Ridge Capital and Innovation Works. According to Subtl founder Rachel Reid, the brand raised $1.2 million in funding throughout its history, including from participation in the accelerator AlphaLab, prior to its series A. Subtl’s revenues weren’t disclosed, but Cult Capital generally invests in brands with a minimum of $2 million in annual sales.

Sarah Woelfel, co-founder and partner at Cult Capital, says, “We look at all categories of beauty, from skincare to cosmetics, haircare and personal care, and what we saw in particular in Rachel that was very different from what’s on the market is she’s really revolutionizing the convenience factor with a product that offers functionality and versatility that no one else is creating. And it caters to a specific audience that’s underserved in the beauty market, which is the time-strapped woman, whether that be a working professional, mom or even a makeup novice who wants easy-to-use products.”

Subtl’s series A funding is slated to go toward increasing its management team, marketing and distribution. Today, the Pittsburgh-based brand has about seven people on its team. Subtl has been available only via direct-to-consumer distribution so far, but plans to evaluate retail options next year. Since 2019, it’s sold over 300,000 product stacks—it calls them Staks—and has grown 170% year-over-year. The average Stak contains five to eight products, and Subtl’s average order value is almost $100.

Despite Subtl’s substantial growth of late, Reid suggests plusses for it fundraising in a tricky environment is that it’s profitable and didn’t succumb to the growth-at-all-costs mentality that characterized DTC brands and venture capitalists’ approach to investing in the pre-pandemic era. Last year, she details Subtl decided to focus on profitability and stepped away from digital advertising efforts that weren’t profitable on the first purchase from the consumers they drew. TikTok has been a strong platform for the brand. It has 136,300 followers and 2.9 million likes on the platform.

“She’s really revolutionizing the convenience factor with a product that offers functionality and versatility.”

“The market caught up to where we are, which is very much operating from a bootstrapping perspective,” says Reid. “I’ll continue as we grow to focus on profitability. Even if one year we’re not putting up these massive numbers, at the end of the day we are building an asset to be ultimately acquired, and I’m focusing on all aspects of what that looks like.”

The idea for Subtl came to Reid, who worked in e-commerce and marketing before launching the brand in 2018, from her taking the proverbial walk of shame. After spending the night at her now-husband’s place, she realized how helpful it would be to squeeze a compact pile of products into her purse to handle her makeup for the day as she scooted out the door. She searched for solutions and didn’t find any, and surveyed about 200 women who confirmed there was a gap in the market for portable makeup if not for walks of shame, then for post-workout, flight or, in the post-pandemic world, between Zoom call touch-ups.

Subtl’s customer base is largely millennial and gen X women. Reid says its vegan, cruelty-free, paraben-free and fragrance-free assortment covers 90% of makeup consumers’ full-face routines. It encompasses concealer, bronzer, eyeshadow, blush, highlighter, shine control pressed powder, lip balm, and lip and cheek tint that all can be interconnected. Each product is priced at $12 to $18. Subtl’s concealer, pressed powder and eyeshadow duo are its bestsellers. It specializes in neutral tones suitable for regular wear.

Informed by its customers, the brand rolled out an upgraded version of its merchandise earlier this year that boosted the amount of product in its sleek packaging to three to four grams to visually communicate that its products last long. For Reid, they last at least a month. She says, “The blush, I don’t think I’ve ever hit pan on, and I wear it every day.” The upgrade also allows Subtl to develop a broader range of products with varying viscosity and prepares it for conveying its concept inside a retailer, where Reid believes Subtl will be a distinct attraction.

“We have this growing consumer base we can bring to a retailer.”

“Being able to build a Stak and personalize your own routine in store, I think is going to bring a really high engagement opportunity to the retailer. So, that’s a really unique experience that we bring,” she says. “The other thing is that one of our core customers is actually somebody who’s not currently consuming beauty…Honestly, the idea of it is really intimidating. When she sees the Subtl Stak, it all makes sense. She doesn’t have to think too much about what she needs to use. So, we have this growing consumer base we can bring to a retailer.”

In 2024, Subtl expects to release products in two cosmetics categories new to it. Asked about whether the brand could eventually expand into merchandise that isn’t stackable, Reid says, “I’m not going to try to retrofit it into the Stak for the sake of it existing in the Stak. We’re not bound to the Stak. I think there are opportunities to launch products that don’t exist in the Stak, but it will need to solve for convenience and portability. We aren’t approaching any NPD with just introducing the same thing as everybody else.”

Founded in 2014, Cult Capital recently closed its second fund and sold a majority of its stake in Supergoop to Blackstone Growth. Last year, Blackstone Growth secured majority ownership in Supergoop with a deal valuing the sun care brand at $600 million to $700 million, per the publication Private Equity Insights. Cult Capital didn’t divulge the size of its second fund, but Woelfel estimates it will invest in five to six companies from it. The firm vets around 300 companies and typically invests in one to two per year. Subtl marks its lone investment this year.

In advance of its investment in Subtl, Cult Capital had been connecting with the brand for two years. “We often start our conversations with companies when they’re a couple hundred thousand in revenue, up to a million in revenue,” says Woelfel, adding, “We’re looking for these really unique, cool brands that are targeting a consumer who has a need and product that is truly differentiated and because of its differentiation has a really loyal base of followers who propel the brand, not just through paid marketing, but through word of mouth.”