Behind HydraFacial’s $1 Billion Valuation
The HydraFacial Co. has publicly released sales figures, ahead of the company’s planned debut on the public markets.
HydraFacial makes a device that aestheticians can use to cleanse, exfoliate and hydrate clients’ skin. The procedure is best known for sucking gunk out of pores, which clients can then examine afterwards, if they choose.
In December, HydraFacial signed a $1.1 billion deal with Vesper Healthcare, a special purpose acquisition company cofounded by former Allergan chief executive officer Brent Saunders. That deal is set to close in the first half of this year, and would result in HydraFacial trading on the Nasdaq.
Ahead of that, HydraFacial released updated sales figures — the company said it expects net sales of $119 million for 2020, higher than the previously estimated $115 million. Those figures are down from the prior year, said chief financial officer Liyuan Woo in an interview, and the company is operating at less than 70 percent capacity.
The company has been operating at “reduced capacity” during the coronavirus pandemic, said HydraFacial CEO Clint Carnell, but has still seen “the Zoom effect” cause an increased focus on personal care.
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“The attention around personal care service is stronger than it was pre-pandemic. So despite…a third of our market being shut down, despite the market that’s open being at a reduced capacity we were still able to post some impressive results,” he said.
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In a standard year, HydraFacial normally sells between 3,000 and 4,000 new devices, which it calls delivery systems, and each generally produces between $5,000 to $6,000 in recurring revenue, Carnell said. For 2020, the company sold more than 2,000. Right now, HydraFacial is available in 87 countries with more than 15,000 delivery systems.
Over the past several years, HydraFacial has picked up popularity. Carnell credits that to a few factors, including a 2017 rebrand that positioned HydraFacial as “three steps, 30 minutes, the best skin of your life.”
“You look good immediately, and we show you the proof — the gunky — all for $150 to $200, is really powerful,” he said. HydraFacial also has a partnership with Sephora.
HydraFacial has developed close relationships with the esthetician community, who bring in around 40 percent of new customers. The company has experienced strong word-of-mouth buzz as well, which also accounts for 40 percent of new customers, Carnell said.
More recently, the company has started to ink brand partnerships, including with Clinique and Murad, where brand-created serums are used during the HydraFacial process. “We want to democratize [skin care] — make sure you have good skin care, and then personalize it based on what you need for your skin concerns of what you’re looking to do for your own health,” Carnell said.
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