January 25, 2000 5:40 PM PST

Beautyjungle.com jumps into business-to-business fray

Beautyjungle.com will announce plans this week to expand into the rapidly growing business-to-business e-commerce market, buoyed by a new $20 million investment.

The beauty products e-tailer, which introduced an online cosmetics site last November, said it will launch an online hub for industry manufacturers and resellers. The privately held company also plans to build and maintain e-commerce sites for beauty-related businesses.

In addition, Beautyjungle.com said it has completed a $20 million second round of financing led by divine interVentures, an Internet incubator focused on e-commerce.

"The business-to-business marketplace, which will bring manufacturers and retailers together, allows retailers like salons and drugstores to come together and find information on products, training resources, new trends--in addition to purchasing products," said Ed LaHood, chief executive of Beautyjungle.com.

The expansion comes as the online beauty industry begins to consolidate, only months after a period of precipitous growth. Beautyjungle.com, Beauty.com, Sephora.com and Gloss.com launched within weeks of each other last fall. Now some have been snatched up by larger e-tailers planning to expand their businesses.

Earlier this month, online pharmacy Drugstore.com agreed to buy Beauty.com in a stock deal worth $42 million. Ashford.com also bought beauty and fragrance site Jasmin.com for an undisclosed sum.

Beautyjungle.com's dual strategy may also help the company set itself apart from competitors.

"The business-to-business component is a huge differentiator in the marketplace; it's a way to set Beautyjungle.com apart, (while) leveraging a common set of assets," LaHood said.

Beautyjungle.com sells a wide selection of cosmetics brands, unlike other beauty sites such as Eve.com and Beauty.com, which only sell "prestige" cosmetics. Beautyjungle.com's shopping areas include high-end department store brands as well as mainstream products such as those found in drugstores.

Beautyjungle.com plans to launch its electronic marketplace in the second quarter of this year.

The company initially raised $3.6 million in July 1999 from individual investors, including funds from company executives and Tampa, Fla.-based Communications Equity Associates.

 

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