Diishan Imira looked at the $6 billion U.S. hair extension and wig market in the U.S. and felt something was amiss. The vast majority of hair extensions used in salons – about 95%, he says — are purchased by customers online or at retail stores, who then bring those products to stylists who use them to service the customer. Salons themselves are not the point of sale, often because of the high cost of human hair.
Simplifying that dynamic offered an opportunity that Imira, 37, seized with the launch of Mayvenn, an Oakland-based provider of real human hair from India he founded in 2012 with COO Taylor Wang. In the past four years, the company has racked up a cumulative $80 million in sales of hair extensions by partnering with hair stylists whose businesses relies on styling with such products, and who direct their customers to purchase hair from the company—essentially recruiting stylists as salespeople by building them websites, offering online support and a 15% cut of each sale, as well as sales incentives like store credit. About 70% of revenue, Imira says, comes through Mayvenn’s network of about 40,000 stylists, the rest from direct-to-consumer.
Imira and Wang’s strategy has attracted some serious growth money. This week the company announced a $23 million investment, which will go towards marketing to customers and stylists, and developing new package deals that combine hair sales with styling services from stylists within the network, at lower cost.
The influx of capital, which constitutes Mayvenn’s series B, brings the company’s overall growth capital tally to $36 million, adding to about $3 million in seed funding raised in 2013 and a $10 million series A in 2015 led by Silicon Valley powerhouse Andreessen Horowitz.
Investors who have laid bets on the firm since its founding include Serena Williams, Cross Culture Ventures and Jimmy Iovine, co-founder of Interscope Records and Beats Electronics. Imira remains the largest shareholder.
This latest cash injection is led by Essence Ventures, a firm founded last year by Richelieu Dennis, owner of Essence Communications and co-founder of the Sundial Brands family of personal care products, which he sold last year to Unilever for an estimated $1.6 billion. With the investment, Dennis bought himself a seat on the Mayvenn board.
“They’re taking a lot of friction out of the process and creating data economics for the professionals and the stylists, and greater value for the consumers,” Dennis told Forbes. The concept caters to an underserved market in both cases which is scalable, he added, which is a winning strategy.
Recruiting stylists to the Mayvenn platform to act as de fact brand ambassadors and points of sale shows a level of innovation the hair extension business has not seen, says Dennis. “We think that this gives Mayvenn the opportunity to be a leader in this space both on the service side and on the community side.”
Partnering with stylists is the main difference between Mayvenn and other players in the space, which includes sources like The Hair Shop, My Hair Closet, Indique, and Remy New York. There are also many brick and mortar options for buyers.
“I never thought I was going to do anything in hair,” says Imira, who moved to China in 2003 after college to teach English. While there he would purchase goods like sneakers, art and furniture for import and sale back in the U.S. on Craigslist.
In 2010, to hone his business chops and make connections, he earned an MBA from Georgia State University in affiliation with the Sorbonne, studying in Brazil, Paris and China. “I had fantastic instincts around business and the fundamentals of how to buy things and sell them,” he explained. “What I lacked was a higher level corporate and finance-based understanding of how to build something large. Nor did I have any connections to people in business.”
The human hair extension market beckoned when Imira’s sister, a stylist in Los Angeles, lamented the cost and difficulty in acquiring hair. Imira became a hair hocker, sourcing supply and selling to salons from the trunk of his car. That’s when Taylor Wang, Mayvenn’s cofounder and COO, entered the picture. Wang had been a client of Imira’s back in 2004, buying sleek Asian tennis shoes from the burgeoning entrepreneur, which he would sell online. Wang founded an e-commerce business, Group Swoop, which he sold to BuyWithMe, Inc. in 2011.
As the two discussed the hair market the concept that became Mayvenn emerged, funded with about $50,000 Imira raised through friends and family. As it operates today, stylists sign up with Mayvenn for free, receive a company-created, cookie-cutter website which acted as a gateway to the company’s online hair extension store, offering various types and styles. Stylists could direct their clients to buy from the site and receive a 15% commission for each purchase, plus $100 of free hair for every $600 worth sold.
“I saw these stylists who, for the most part, are independent contractors—they rent their chairs in a salon; they’re entrepreneurs,” says Imira. “I’ve always been an entrepreneur and I saw a way to empower them and, in my view, bring more equity to the marketplace where you’ve got African American women who are purchasing billions of dollars of products but are not really sharing in the economics of it at all.”
Imira ran the concept through 500 Startups in 2013, primarily to make connections to other entrepreneurs and investors he felt could be of help. “I took VCs on field trips to hair salons and beauty supply stores,” he remembers. The effect, he says, was astonishment. “That was what closed the deal.”
That year the company raised $3 million in seed money to get the network up and running and secure hair products from Asia. A series A two years later brought in another $10 million and spurred growth.
Imira first met Dennis several years ago through an introduction by the Sundial chief’s cousin, Emmett Dennis, and Imira identified Dennis as someone from whom he could learn. Ironically, the hair care giant saw elements of Mayvenn’s strategy that could inform its own growth process. “They saw what I was doing in helping to build distribution through these hair salons and through stylists as a component to what they had been trying to do for a long time,” says Imira.
The companies stayed in touch and once Dennis sold Sundial Brands, flush with cash, investment talks began in earnest. “The biggest synergy is that we believe that in all of our businesses, the common theme is community,” says Dennis. “Especially serving under-served communities – that’s our sweet spot – and that’s exactly where Mayvenn fits.”