Conserving Beauty finds a balance between impact and non-impact investors

Impact-based beauty business Conserving Beauty is backed by both impact and non-impact investors which its founder says provides the startup with invaluable insights.

Natassia Nicolao, founder of Conserving Beauty spoke to Digital Nation about the difference she sees between the two types of investment firms.

Nicolao said she wanted to have a balance between impact and non-impact investors.

“It’s good to have both though because they've been they both bring different things to the party,” she said.

“If I only had investors that only cared about a financial return, then projects, investments in R&D and certain choices that we make at a board level would probably not get through the cracks unless somebody said ‘no, that's very important’.”

For example, Conserving Beauty has designed and built their own machinery to create their products. Nicolao said if they didn’t have impact investors, they would have been advised to use the money on something else like marketing.

“Whereas on the R&D impact side, they were like that’s important because you're closing the loop, you can control your energy and your water usage. You’ll end up being able to scale which over the long term will end up having a greater financial return,” she said.  

“They’re playing a little bit more of the long game, which aligns with me because I never wanted this business to be a short-term cash grab that is not what we're trying to do.”

Undertaking the R&D process with the impact and the non-impact funds, Nicolao said the questions asked by each side were on different sides of the spectrum.  

“The consumer side is very curious about digital marketing, average order value, customer acquisition costs and return on investment, which are very important things,” she said.

“The impact side asks how much water you're going to save over 10 years, what your SDG goals are and how you're validating that and do you want a B Corp?”

Nicolao explained why it was important for conserving beauty to get an impact fund backing her business.

“I often describe my business as half an impact company and half a beauty brand. We invest so much in R&D, our water footprint, our carbon footprint and waste footprint,” she said,

“I knew the type of business structure that we have is probably more desirable to an impact company purely because we spend so much in that space.”

Nicolao said the company’s margins aren’t “cash grab-esque”.

“For me, [impact investing] added a layer of credibility to say what we're doing holds a lot of value. There is a lot of efficacy in the work that we're doing behind the scenes and the fact we track and measure that with an impact company,” she said.

“It was very important for me, I dreamt of getting one impact company and we ended up getting two. We've got Giant Leap and we’ve got Alberts Impact Capital.”

Conserving Beauty calls itself Australia’s first waterless beauty brand.

While working across product development, sustainable sourcing, supply-chain, and operations, Nicolao realised that a water footprint was involved at every step of the beauty product process.

Coupled with her understanding of environmental, social and government (ESG) principles, Nicolao launched Conserving Beauty in 2021 to encourage water conservation across the beauty industry.