This week we had the pleasure of announcing our investment into Nøie, leading the $12m Series A round with participation from Inventure — as well as angels like Thomas Ryge Mikkelsen, former executive vice president at jewellery company Pandora and Kristian Schrøder Hart-Hansen, former CEO of LEO Innovation Lab.
Playing into our ‘tech changing how we live’ thesis, Nøie is a Copenhagen-based platform that has developed customised skincare products for people who suffer with chronic skin conditions like acne, eczema and psoriasis: with the critical mission not only just to help customers to address these skin concerns, but to improve their quality of life. This fundamental mission is central to everything the company does and it really shows through in every facet of how they operate: the founding team has suffered first-hand from these conditions as well as seeing their loved ones face similar issues. Nøie in English, means careful, accurate and meticulous, which could not do a better job in reflecting their approach to taking care of skin.
Nøie is applying a tech-driven approach to combatting skin conditions. To do this, Nøie screens thousands of products on the market, selects the highest-performing ingredients and combines this with scientific research on specific ingredients to build the largest database of skin profiles, which the company has coined ‘skin families’. Customers take Nøie’s rigorous skin test which uses an algorithm to assign customers to their skin family and are then recommended customised products to suit their skin type. The database that Nøie utilises — enabled as a result of the company being span out of LEO Innovation Lab — is incredibly comprehensive and unlike anything else we’ve seen in this space: it not only defines the effect of ingredients against specific skin issues, but also enables a synergistic effect of ingredient combinations. This dataset enables hyper-personalisation to its customers at a massive scale and will enable the company’s rapid growth into new markets.
Critically, Nøie integrates customer feedback loops into its R&D processes, which allows them to continuously evaluate the effectiveness of their products and improve their statistical model with every feedback point. The outcomes speak for themselves: 78.1% of customers have reported an improvement in their skin after 30 days of using Nøie products, and c. 65% of growth in the Danish market has been organic. What makes this approach so compelling is that Nøie is totally reinventing the traditional skincare industry’s broken user journey by reinventing its outdated and linear approach to R&D. How many times have you headed to a pharmacy to purchase skincare and eventually decided on a product based on its marketing, or how nice the packaging is? Too many times, I bet — and this is why you’ve also been less likely to see any significant improvement after using these traditional products. Enter Nøie.
The skincare industry was worth $148bn in 2020 and is due to reach $189bn in by 2025. The timing for Nøie’s commercialisation couldn’t be better: skincare saw a huge boost post-COVID with people focusing more on self-care while they were confined to their homes. Nonetheless, the progressive eclipse of make-up influencers by the phenomenon of ‘skinfluencers’ has been going on for some time, with many Gen Z celebrities like Billie Eilish promoting going make-up free, bringing the focus back to how you can care for your skin — rather than how you can cover it up. Customisation is also becoming increasingly key, with 63% of beauty customers indicating an interest in personalised products.
The beauty industry is notoriously irresponsible from an environmental perspective: every year, 120 billion units are created by the industry and 91% of the plastic used is not recycled — and on top of that, large beauty companies mass produce which often leads to obsolete stock inventory. Needless to say, customers are increasingly concerned about the impact of their consumption of consumer goods on the environment, and brands with stated purpose are perceived well: 72% of Gen Z state they would spend more money on a product if it were sustainably produced, and 87% of millennials say they’d be more loyal to a company that contributes to social and environmental issues. The beauty of Nøie is that sustainability has been integrated into its mission since day one to counteract the beauty industry’s mammoth carbon footprint. Chris Christiansen, one of the two co-founders, has taken the role of Chief Footprint Officer to keep the company closely aligned to its sustainability goals: the company has ambitions to be carbon negative in 2021 and 100 percent circular in the long-term. Nøie’s product packaging is made up primarily of post-consumer recycled and ocean waste plastics, and deliveries are CO2 neutral, compensating for carbon emissions produced in the shipping process by planting trees in Denmark. Given the products are tailor-made for every customer, the issue of obsolete stock is redundant for Nøie.
The co-founders of Nøie, Chris and Daniel Jensen (the CEO), have a fantastic track record in this space: Chris’s experience in ecommerce and D2C at the likes of Rocket Internet and LEO Innovation Lab (where Daniel and Chris met) complement Daniel’s expertise as a serial entrepreneur: Nøie is his fifth business. The leadership team has decades’ worth of experience in FMCG and marketing as well as molecular biology and genetics. Overarchingly, the team is united by its genuine passion and drive to improve the lives of people with chronic skin conditions, and it’s this passion — complemented by their collective experience — that will drive Nøie’s success.
For too long have both the dermatology sector and the skincare industry relied on the outdated ‘one-size-fits-all’ approach to addressing chronic skin conditions. While the biggest challenge for Nøie will be intrinsically changing the long-standing consumer behaviours in the skincare space, Nøie’s data-driven and community feedback approach has the potential to pioneer a skincare revolution. Daniel and the Nøie team have an incredible energy and passion for their work: their values and mission are built on both their own first-hand experiences and the frustrations of many. We’re incredibly excited to be joining Nøie to achieve their mission of improving quality of life of those suffering with skin conditions!
Talis invests in all tech and tech-enabled businesses but we deep dive into specific sectors when we believe the timing is right.
We are on the brink of one of the most exciting production and supply chain revolutions of the century, with similar disruption potential to the Industrial Revolution in Britain in the 19th century.