Japan’s Lips raises $5.2M to enhance word-of-mouth based cosmetics review app

Image credit: Appbrew

See the original story in Japanese.

Tokyo-based Appbrew, the Japanese startup behind a community and word-of-mouth marketing app focused on cosmetic and beauty products called Lips, announced on Wednesday that it has secured funding in the amount of 550 million yen (about $5.2M US). Participating investors include Gunosy, Gree, Anri, as well as several angel investors. The share ratios and payment dates are undisclosed.

Launched back in January of 2017, Lips is a community app that allows users to search reviews of cosmetics. Users can post reviews with photos of cosmetics or collect information on cosmetics they are interested in. As of February 2017 it had exceeded 550,000 downloads.

In January of 2017 the company began recruiting for “Lips Girls” and received 2,500 applications for 50 positions. There are also some popular users who have over 20,000 followers in the Lips app.

In a recent interview with The Bridge, AppBrew’s managing director Yuri Matsui explained:

We took to heart that Lips Girls are not just people with many followers, but rather people who have a core group of fans.

We also focused on whether or not we are communicating effectively with the atmosphere and users.

Currently, the users are largely comprised of teens, junior high school students and high school students, but the company will attempt to expand its user base in the future. Matsui said, “The cosmetics that junior high and high school students think are good and the cosmetics that women in their thirties think are good are different,” and in the future the company is also considering adding functions such as personalized feeds and cosmetic rankings by users.

From January of 2018, Appbrew has begun offering advertising options for companies as well as sampling services for Lips users. Currently, the company has achieved actual results with more than 10 companies, and it plans to continue to monetize by acquiring more partners. The company currently has no plans to charge users, and instead is heading in the direction to carry out monetization solely through B2B (business-to-business).

Considering business expansion into C2C model

From left: Managing Director Yuri Matsui, CEO Yuta Fukazawa
Image credit: Sekiko Suzuki / The Bridge

This round follows their previous funding back in February of 2017. Regarding the latest funding, CEO Fukuzawa remarked, “Make Lips a service that every girl knows, in order to try our hand at new products.” The funds raised this time will be used for recruitment and marketing expenses for service development.

Matsui added:

People who are familiar with the Internet and are fans of influencers have discovered Lips, but we need to make it an app that all girls know.

The purpose of this round of funding is to strengthen our marketing to do just that.

The company will also strengthen its in-house marketing system, as well as the utilization ratio and CPA per user, and set up a more detailed strategy. Additionally, Gunosy who participated as an investor this round will also assist by examining the company’s future efforts. The aim is to build the Lips brand and expand active users.

The current team is made up of 15 members including interns. A team of five engineers has been assembled, so Fukuzawa is now at the phase of developing a new product. This does not mean focusing on new services soon, but, “I’d like to try for a service that gains an even larger share while building prototypes.” The specific content is under consideration, but I am imagining a service development related to goods for C2C. The company also has plans to appoint a CTO in the future for the strengthening of products and new development.

Translated by Amanda Imasaka
Edited by Masaru Ikeda