Beauty company Ami Colé, led by black owners, to cease operations
Ami Colé Shuts Down: A Setback for Black-Owned Beauty Startups
In a disappointing turn of events, the award-winning beauty startup Ami Colé has announced its closure, set to take place in September 2023. The company, which specialises in makeup for individuals with darker skin tones, has been a notable player in the industry, gaining celebrity favour with the likes of singer Kelly Rowland and actress Mindy Kaling.
Despite securing over $3 million in venture capital, Ami Colé faced significant challenges competing against larger, better-funded corporate beauty brands. The high cost of market competition and retail barriers, such as securing prime shelf space in major retailers like Sephora, proved to be a major hurdle.
The founder, Diarrha N'Diaye-Mbaye, alluded to tensions and difficulties in aligning the startup’s retail consumer business growth with VC investor expectations. The pressures to scale rapidly in a tough market contributed to the closure decision.
Ami Colé's closure highlights broader issues affecting Black-owned startups in venture capital and retail markets. Undercapitalization, high operational costs, systemic inequities in funding and retail space access, and the challenge of scaling consumer brands against well-funded incumbents are some of the challenges these startups face.
The closure occurs during a broader decline in venture funding for Black founders, with funding dropping to 0.4% according to Crunchbase. Despite initial attention and investment after the murder of George Floyd due to investors and corporations seeking to support diversity, equity, and inclusion initiatives, sustaining that momentum has proved difficult.
Diarhya N'Diaye-Mbaye, the founder of Ami Colé, remains optimistic about the future, despite the shutdown of her brand. She hinted that one of the challenges the brand faced was a disconnect between her vision and investors' expectations for a consumer retail business.
As Ami Colé bids farewell, other Black startups in the beauty industry, like CurlMix, are getting creative about alternative sources of funding. The future of Black-owned businesses in the venture capital and retail landscape remains uncertain, but the resilience of entrepreneurs like Diarrha N'Diaye-Mbaye offers a glimmer of hope.
References:
- TechCrunch
- Fast Company
- Forbes
- PitchBook
- Crunchbase
- Venture capital funding for Black-owned startups, like Ami Colé, continues to face significant challenges, despite initial investments due to the pursuit of diversity, equity, and inclusion.
- Diarrha N'Diaye-Mbaye, the founder of Ami Colé, is exploring alternative funding sources to continue her venture in the fashion-and-beauty industry, demonstrating the entrepreneurial spirit that persists in Black-owned startups.
- In addition to funding issues, Black-owned startups often confront high operational costs and systemic inequities when trying to secure retail space in key marketplaces, making it difficult to scale and compete against well-established brands.
- The closure of Ami Colé serves as a reminder that personal-finance management and successful investing in Black-owned startups require a comprehensive understanding of these systemic challenges and innovative strategies to support sustainable growth.
- As the landscape of business and finance evolves, it's crucial for venture capitalists to consider the unique difficulties faced by Black-owned startups and implement targeted solutions to promote equity and inclusion, ultimately benefiting the entire startups ecosystem.
