How a Korean beauty ecommerce company became one of Y Combinator’s top startups

Six years ago, in South Korea, two young Koreans had a single goal: to help people discover new beauty products.

Dino Ha is an electrical engineering student who loves computers and has taught himself to code in C++. He partnered with Doin Kim to experiment with a new ecommerce project.

Memebox collaborated with Sephora to create a Korean cosmetics line. / Photo credit: Memebox

Giving themselves three to six months to make something worthwhile, Ha and Kim eventually created the fast-growing Korean beauty ecommerce company Memebox. It became one of the most valuable startups to come out of the famed accelerator Y Combinator, raising over US$158 million.

Since 2010, Korean pop culture (or hallyu) has been on the rise. More people began looking at Korean fashion and cosmetics – from bright contradicting colors in clothing to the impeccably fair skin of celebrities.

To take advantage of this trend, Ha and Kim launched Memebox as a subscription service featuring Korean brands. Users paid a set subscription fee of US$15 to receive monthly a box filled with various beauty products – both famous and lesser-known.

However, back in 2012, a subscription box business like Memebox was an unfamiliar idea in Korea and Asia.

Ha and Kim faced many challenges in the early days. Investing US$8,000 of their own money, they spent weeks contacting brands and negotiating deals. Even with only 1 or 2 percent acceptance rate from potential partners, they pushed on, eventually hitting US$1 million in sales without any external funding.

While hallyu had something to do with their growth, Ha attributes the early traction to his company’s ability to provide data to brands and just being in the right place at the right time.

Dino Ha, co-founder of Memebox / Photo credit: Dino Ha

One of the offers Ha and Kim made to brands in exchange for their products was providing data insights in the form of 150 PowerPoint slides, representing tons of data that captured consumer behavior. In this way, Memebox demonstrated that they’re not just a company that repackages products, but also a type of digital marketing analytics service.

Securing a prominent brand also helped them close deals with the rest.

“It’s always about who your first partner is. The person in charge of L’Occitane Korea had been finding a digital partner,” says Ha. “We just happened to be in the right place at the right time. Once we had them as a partner, every competitor who looked up to L’Occitane wanted to participate. Afterward, finding brands was not too difficult.”

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