With funding from major DTC startup investors, temporary hair-dye brand Hally joined Ulta Beauty’s lineup on Sunday night with a focus on Gen Z.
For its first retail partnership since launching via a DTC site in February this year, the brand’s holiday gift box kits will be available on Ulta.com through the holiday season and promoted in the retailer’s Sparked section online. The Ulta Beauty launch comes after Hally received $4 million in seed funding in September from VC firm Bullish, which is known for its investments in DTC brands including Peleton, Warby Parker and Harry’s.
“With the launch, we just caught a lot of inbound interest from buyers, going to show that it has been a very antiquated, overlooked category,” said Kathryn Winokur, founder and CEO of Hally.
“Over the past 18 months, we’ve just seen that retail, across the board, wants to find these shiny new toys and interesting companies earlier and earlier, to give people reasons to come into the store,” said Michael Duda, managing partner of Bullish, adding that Hally had “many more suitors” than Ulta Beauty for retail partnerships.
In Piper Sandler’s fall 2021 “Taking Stock with Teens report,” Ulta Beauty was listed as the No. 1 beauty shopping destination for Gen Z. The survey also found that spending on hair care increased by 8% in the past year.
Retail partnerships are now key for most DTC brands.
“The only pure DTC companies we still have are Warby Parker and Peleton,” said Duda. “No sane human being spends all their time on Google and Facebook.”
He added, “We’re seeing a lot in the health and beauty industry, so it’s obvious there’s huge potential here as an investor.” In beauty, Bullish also invests in Birchbox and Function of Beauty. Duda expects growth for the DTC at-home hair-dye category beyond the surge it saw during the pandemic. “We look at it on a more macro basis. We think this category is right,” he said.
While hair dye “hasn’t historically had a big giftable component to it,” said Winokur, Hally is marketing temporary hair dye as a fun experience rather than routine maintenance. The brand’s holiday gift sets include self-care eye masks, scrunchies and hair clips, which complement its colorful branding. Since its initial launch with three colors, it has released three additional shades: a blue shade with 19-year-old YouTuber Ellie Thumann (2.2 million subscribers), a purple shade with Reese Witherspoon and Ryan Phillippe’s daughter Ava Phillippe (994,000 Instagram followers), and a black shade for Halloween promoted via its “Hally-ween” campaign on social media.
The positioning of the brand is to be a “premium offering to the legacy CPG players, but we still very much want it to be an approachable, affordable price point,” said Winokur. The regular hair-dye sets and holiday gift kits retail for $25 each.
Hally’s strategy for Gen Z has also included major celebrity promotions. When it launched in February, the brand was endorsed via Instagram Stories by Chrissy Teigen and multiple Kardashians, including Kim, Kourtney and Kris Jenner, thanks to the brand’s investment from longtime Kardashian family friend Simon Huck. Huck was a pre-launch investor in the brand and joined its board during the most recent funding round.
Huck said via email that he invested in the brand because it “makes the hair dying process easy, affordable and fun, especially for younger Gen-Z consumers that are looking for alternatives to the old box hair dye that’s been around forever.”
While rainbow hair colors and the “e-girl” hair trend were especially popular during the earlier days of the pandemic, natural shades have made a comeback with the return of school, work and big events such as weddings. The brand’s current most popular shade is its “Atomic Blonde” color.
“Everyone was posting about pink hair during quarantine, but then maybe their best friend doesn’t want that if they’re a bridesmaid,” said Winokur.