A New York-based chain of facial spas for the digital generation has established its first location in Southern California and plans to open more with the help of an $8 million funding round led by Venice-based Fifth Wall Ventures.
Heyday Wellness’ new facial shop at 7228 Beverly Blvd. in West Hollywood is its first outside of New York, said Adam Ross, the company’s chief executive and co-founder. Ross said Heyday is building a foundation for moves into other major U.S. cities, including Boston, Chicago, Dallas, San Francisco and Washington, D.C.
The company’s business model aims to smooth the lines between the in-person facial-spa experience and the ease of online appointment-booking and shopping. Heyday collects data on customers’ skin type and facial features, and helps clients keep track of their skin-care regimen between appointments.
Since the first Heyday shop opened on Broadway in New York in June 2015, the skincare chain has drawn venture capital interest. Among its first investors in a $3 million seed round were venture capital firms Lerer Hippeau and Brainchild Holdings.
In the latest Series-A round, Fifth Wall was joined by the previous funders (Lerer Hippeau and Brainchild Holdings) as well as new investors M3 Ventures and CircleUp. Fifth Wall Principal Kevin Campos has joined Heyday’s board to help map out growth.
The $8 million in new funding will go toward the company’s brick-and-mortar expansion in Los Angeles and other parts of California. Ross, a former mergers and acquisitions banker in New York, said, “Our strategy for Heyday is to replicate what was done in New York. …We see a path to more doors in L.A. than New York.”
The company’s current crop of six storefronts, each about 2,000 square feet in size, are generating a total of “slightly north of $10 million” for the company in annual revenue, according to Ross.
Heyday is exploring expansion in L.A. neighborhoods known for steady foot traffic, including Silver Lake, Santa Monica, Brentwood, Century City, Culver City and Beverly Hills, as well as downtown to cater to its fast-growing professional crowd.
“The goal is to reach the right level. You don’t want to oversaturate the area,” said Brendan Wallace, co-founder and managing partner with Fifth Wall, which targets its investments in digital-friendly companies building a physical presence.
Heyday also announced a new hire in its West Coast operation − Ashley Peterson, who will execute Heyday’s expansion plans. Peterson previously served as the vice president of experience at Sweetgreen Inc. where she helped build the Culver City-based fast-casual salad chain to a national business with nearly 100 stores from a small regional brand with fewer than 20. Heyday said Peterson will bring the same strategic approach to its growth in Southern California and beyond.
While its name references a time gone by, Heyday is offering facial services for the most modern of consumers. The company targets a prime demographic of customers in their early 20s to late 30s, and it keeps close track of them with digital tools.
Roughly 90 percent of its customers start online, making appointments either on their personal computers or cellphones. Once they’re in the door, the digital-native spa chain takes detailed note of their facial characteristics.
Since its 2015 launch, Heyday has amassed a database of more than 200,000 facial characteristics of its clients, and it’s employing analytics in a way that is upending norms in the beauty sector, according to Ross.
“There is a detailed skin analysis done when you come the first time,” he said.
Heyday’s database tracks whether customers have had dry skin or oily skin in the past and if they had acne as a child. And it keeps tabs on the hair and skin products clients use. With that information, Heyday comes up with recommendations for ways to improve skin treatments, keeping track of all data collected from every customer.
“The therapist analyzes your skin, describes what product you should be using at home,” he said. Prices for Heyday’s facials are $65 for 30 minutes, $95 for 50 minutes and $140 for 75 minutes.
The digitized information allows Heyday to filter out the content that is not important. When a customer returns for a visit, his or her profile shows what tests were done, what the customer liked and what treatment worked. And in between appointments, customers can replenish those products by purchasing them through Heyday’s online store.
Another advantage Fifth Wall brings to Heyday in addition to capital is its connections to other businesses such as Santa Monica-based Macerich Co., the third largest operator of shopping malls in the country and one of Fifth Wall’s backers.
“They provide advantageous leasing and mentorship,” to businesses like Heyday, Wallace said. “We structure the partnerships to grow business.” He said there could be an opportunity for Heyday to collaborate with luxury hotel groups as well.
Ross said Heyday may look to raise another round of funding within 18 months.
“For us, we’ll do what is right but be smart in how we do it,” he added, saying Heyday would aim for between $10 million and $25 million in the next round.
Heyday isn’t the only startup skincare player in town.
West Hollywood-based Face Haus, a beauty bar whose slogan is “facials for the people,” opened its fifth location in El Segundo this month and has plans already in the works to open another in New York later this year. The New York location will be its first leapfrog out of the L.A. region.
The founders began developing the concept for their spas in 2011 after they treated their daughters to facials for a 13th birthday party that came to $150 a person. Face Haus aims to offer those same services without pricey amenities.
Aghast at the money they dropped for their teens, the founders pooled their personal savings and opened the first Face Haus in Studio City in January 2014; a West Hollywood location followed a few years later. An undisclosed outside investment into Face Haus led to two more locations opening – the first in Santa Monica in July and another at USC Village in August. A fifth location opened in El Segundo this month.
Face Haus facials have an average price point of $65.
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