Google, Amazon alum pockets funding to create personal care products with influencers

When Sreejita Deb first launched her startup Raena as a marketplace for Indonesian customers looking for niche beauty products, she saw that there were plenty of brands that wanted to work with influencers on paid promotions. On the other hand, influencers “wanted to created their own brands but lacked the resources and infrastructure to do so.”

“There was a gap,” she says.

Sreejita Deb with Indonesian influencer Moonella and Family / Photo credit: Raena

That prompted her Singapore-based team to switch gears. Established in early April, Raena now partners with social media influencers to create and sell consumer products. It does this via a network of suppliers that take care of the manufacturing end, as well as operations and distribution partners.

The company has just closed a US$1.82 million seed round led by early Zilingo investor Beenext. Participating in the deal was Beenos, an early investor in Tokopedia, as well as Strive (formerly Gree Ventures), which is a backer of Bukalapak and BerryBenka. Blume Ventures managing partner Sanjay Nath and Shailesh Rao, partner at TPG Growth and Rise Fund and former Twitter and YouTube exec, also joined in their personal capacities.

Influencer marketing

There are several problems Raena is trying to solve, according to Deb. First, customers in developing markets want access to products that make for unique use cases, but incumbent consumer packaged goods (CPG) companies are lethargic when it comes to innovating for emerging markets. Second, with the rise of video and social media, the audience for influencers is growing in countries like India and Indonesia, but the digital advertising industry is still not as developed as the US or China, limiting their income sources. “We offer influencers infrastructure… so that they can monetize their following through creating products that are authentic to their personal brands,” she says.

Plus, predicting which product will be a hit is one of the tough parts of a retail business. “By partnering with an influencer, we not only gain access to a pool of followers but gain quick iterative feedback on our products even before they are put into development,” explains Deb.

The first clue that influencer-led brands would work came when Raena got two leading Indonesian beauty influencers to promote products sold on its marketplace, at the time of the original business model. “The products were priced at a premium and unknown, but we saw very high return on our marketing investment,” Deb recalls.

Fast forward to June 13, Raena and its first influencer partner Moonella and Family – who has 2 million followers – launched their inaugural product, a balm, under their brand called Lalabee.

Deb said the product is differentiated in the way it was formulated. “The ingredients are all natural, contains no petroleum jelly or phthalates etc. There’s a growing trend among millennial parents to insist on safe ingredients.” This comes as some CPG brands like Johnson & Johnson have come under fire for supposedly cancer-causing substances found in their products.

In contrast to those large CPG companies that take 24 to 36 months to introduce a brand, Deb claims that she and her team rolled out theirs in five weeks. The product retails on Lalabee.co, the brand’s own site, and on popular Southeast Asian marketplace Shopee.

Deb declined to divulge any financial details like how much revenue Raena has earned, how many items it has sold, and how its unit economics look.

However, she shared that its Lalabee balm has a 4.9 rating and close to 150 reviews on Shopee in its first month, and that the 30 ml version is sold out. Raena has also signed five influencers with a total reach of 10 million, and it will be working with them to launch up to 15 products by the end of 2019.

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