KKR, 5Y lead Series C for China contact lens brand

Source Code participated in a RMB60 million Series A in 2020 alongside Matrix Partners China and GL Ventures, according to AVCJ Research. This was followed in February by a Series B and a Series B extension of RMB380 million. CPE, GGV Capital, XVC, Matrix, Source Code, and GL all participated.

Founded in 2019, Shanghai-based Moody is China's largest online seller of cosmetic contact lenses. Priced at RMB89-119, its products are targeted at women in top-tier cities aged 18-35. Revenue exceeded RMB200 million in 2020 and is expected to hit RMB800 million this year.

In the post-COVID era, with people wearing masks in public, contact lenses have replaced lipstick as a basic cosmetic need for women, according to a local consumer research report. They also enjoy a higher repurchase rate than lipstick, typically 30-50% versus 20%. 

Moody will use the new capital for R&D and global expansion. The company is also looking to strengthen its supply chain. It is collaborating with the only factory in Asia - a supplier to leading Japanese cosmetic contact lens brands - to realize fully-automated production in the space. Moody has invested RMB300 million in lens material research and production line optimization. It plans to commit another RMB500 million.

In the same space, Dearer Medical raised a RMB420 million Series B funding from CPE, Legend Capital, and Insight Capital in May.

It reflects a broader interest in China's beauty economy as domestic brands emerge that are attuned to the demands of younger consumers and leverage internet-based marketing and distribution channels. Cosmetic brand Perfect Diary, which listed in the US last year, is arguably the most high-profile example.

Moreover, contact lenses represent a discrete investment category in North Asia's competitive beauty and cosmetics space. Last year, Japan's Integral Corporation acquired T-Garden, which pioneered fashion model-led contact lens marketing in the country. Meanwhile, in Korea, VIG Partners bought Star Vision in 2018.

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• Topics
• Greater China
• Expansion
• Consumer
• China
• KKR
• 5Y capital