Beauty’s newest backers? Celebrities

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Kate Hudson is not only an actor and entrepreneur; she’s now adding beauty investor and creative advisor to her repertoire. This week, Hudson became just that for Symbiome, a San Francisco-based microbiome-focused skincare brand that she has been using for years in a non-sponsored capacity. “Almost immediately after I started using Symbiome, I could see and feel the difference,” Hudson said in a statement. She added that she felt aligned with Symbiome’s “mission to improve health from the outside in”.

Hudson is no stranger to beauty, having collaborated with wellness brand Juice Beauty, launched her own nutrition company Inbloom, and taken on the role of global ambassador for medical aesthetics firm Alma Lasers. However, her role as an investor and advisor marks a shift in the industry as a growing number of celebrities invest in beauty brands after many years of taking on ambassadorship roles and acting as spokespeople.

Last September, pop star Dua Lipa became an investor in Dizziak, a cult London-based hair and body care brand. Singer-songwriter Miley Cyrus invested an undisclosed sum in Dolce Glow this February, following years of receiving custom spray tans from the Los Angeles-based self-tanning brand’s founder Isabel Vita. US media personality Oprah Winfrey invested an undisclosed amount in Dr Barbara Sturm’s namesake science-backed skincare brand in April. Model Karlie Kloss is among the stars that have teamed up with private equity firm L Catterton to invest in coconut oil brand Kopari. Influencers are also becoming sources of funding: Leandra Medine Cohen, of Man Repeller fame, has invested in skincare brand Drunk Elephant and makeup label Kosas.

Celebrities who invest in brands typically get an equity stake in return (that amount varies depending on the company’s valuation and what the talent is able and willing to bring to the business). The two most common deal structures are where celebrities invest their own money (usually between $100,000 and $1 million), or where stars invest their time through sampling, feedback and/or by offering creative input or advisory services. Unlike ambassadorships, these roles tend to be behind-the-scenes.

There is a reluctance among some talent agents to invest time and resources in a long-term investment play with no guarantees, says Vickie Segar, founder of WPP-owned agency Village Marketing. “It could be a hit or miss, so you’d have to be willing to work for years with the potential to make money — but no [traditional talent agency] is set up that way because you have to pay people for their time.” Cash-heavy sponsorship deals are popular because they’re a safe bet, but it’s a shortsighted move, she believes. “We’ve seen celebrities being pushed towards TV commercials and multi-million-dollar deals when, actually, there are so many other deal structures that they should be entertaining that could make them real money over time.”