How This Cosmetics Brand Was Acquired for $630 Million

Hero Cosmetics started because of a very simple problem: the founder, Ju Rhyu, was having trouble with acne and couldn’t find the right product for her problem. Frustrated with the complicated, full of chemicals options on the market that required her to wait a week, allow her skin to peel, or strip her already sensitive pores.

The solution came from South Korea. Hydrocolloid, a dressing traditionally used for open wounds, could be worked into a small patch that fought acne issues while causing minimal skin irritation.

Hero Cosmetics’ star product is the Mighty Patch, which Rhyu found during her time in Seoul. It launched its single SKU on Amazon in 2017, and it has since become the number one selling beauty product the retail behemoth offers. On Amazon, if you query “acne,” “pimple patches,” or “acne patches,” you’ll see Hero.

“It’s been incredible to see how quickly the brand has caught on with consumers, solving an unmet need for so many people searching for better acne solutions,” said Jackie Dunklau, cofounder of Aria Growth Partners, one of the first investors in Hero. “Ju and the Hero team have done an amazing job navigating explosive growth while being disciplined and always putting their customer first.”

It’s somewhat unique that the company went to Amazon immediately for sales. Digitally native vertical brands, of which Hero Cosmetics is one, frequently shun that option in favor of their own curated online site. The decision paid off, though, as the company just about seized control of its niche solely through Amazon.

Today, the product sells a unit approximately every three seconds. The company has since expanded to include other skin products, namely moisturizers, toners, and cleansers, and new possibilities may well be unlocked through their new partnership.

The five-year-old company has grown more rapidly than Rhyu could have ever expected …

“I’ve loved seeing how our brand and products positively impact people’s lives and that impact only grows with time,” Rhyu said in an interview with Forbes. “We get many reviews about how Hero products have been nothing short of life-changing.”

As the company continued to grow, the founders were ready to consider selling the company. Five years later, one of the largest companies in the game was interested. Church & Dwight, a manufacturing company providing “home goods, personal care, health, and global consumer products all around the world,” put in a bid. The yet young company accepted a buyout for $630 million on September 6, and production giant Church & Dwight will take over their product line.

Rhyu, who will remain chief executive officer, expressed excitement for the company’s future.

“This acquisition with Church & Dwight marks a huge milestone in our company’s history and I am so excited to unlock more growth with them,” she shared. “We expect that we’ll accelerate some of our growth plans, like continued US expansion and growing our international footprint, while tapping into some of Church & Dwight’s infrastructure and back office capabilities.”

While Rhyu remains CEO, two other cofounders will be along her side on the executive team. Dwight Lee and Andy Lee will respectively serve as the chief operating officer and chief design officer, allowing the founders still control over much of the company. “For me, it’s a moment in time. It’s not the end,” Rhyu said. “There is a next chapter, and I’m staying for that next chapter.”

Church & Dwight CEO Matthew T. Farrell issued a statement about the acquisition and shared that he was looking forward to their partnership. “Hero and its Mighty Patch brand represent a powerful addition to our existing Specialty Hair and Skin portfolio,” Farrell said in the statement. “The brand skews toward younger consumers and consistently has a high level of brand loyalty and repeat purchase.”

Ju Rhyu is excited for what comes next, and rightfully so. She’s worked from a simple business model from day one and recognizes the potential for growth when she sees it. It’s remarkable, actually, just how simply she summed up the process on Twitter. “One sku on Amazon. Then a few skus. Then one sku at Target. Then a few more skus. One sku at Ulta. Then a whole shelf,” tweeted Rhyu.

Rhyu is celebratory of the move for Hero Cosmetics and also recognizes that it may well have a positive impact on companies like hers, especially those who may be looking to make similar moves in the future.

“It’s a huge win personally, for the team, and for the consumer ecosystem,” she said. “But it’s also a win for entrepreneurs because it shows that you can take a small idea and turn it into a successful business that is both high growth and highly profitable.”

Hero also proves that the conventional way is not always necessarily the best. What do most successful entrepreneurs say? “Think outside the box” comes to mind, and think outside the box Rhyu did. By taking the slightly less traditional route and putting her eggs in the Amazon basket, her brand had grown to be a genuine global competitor even before the acquisition.

Now, there’s nothing to suggest there’s any direction to go but upwards with the funding, manufacturing, and partnership with Church & Dwight spurring them towards new horizons.