Investment Proposal Draft - Tower28 Beauty

 To: Professor Clark Hansen, CEO, Anima Mundi Development Partners (AMDP)

From: Allison Alban, Research and Development Department
Date: March 4, 2025
Subject: Investment Evaluation of Tower 28 Beauty

Introduction

In alignment with AMDP's commitment to investing in socially responsible, environmentally sustainable, and profitable enterprises, I have conducted an evaluation of Tower 28 Beauty for potential investment. This memo provides an overview of key sustainability concepts, a detailed analysis of Tower 28 Beauty, expert opinions on the company's practices, and a recommendation regarding investment.

Key Sustainability Concepts

Triple Bottom Line (TBL): A framework that assesses a company's performance based on three dimensions: social (people), environmental (planet), and financial (profit). It emphasizes that businesses should measure their social and environmental impact alongside financial performance to achieve sustainability.

Corporate Social Responsibility (CSR): Refers to a company's initiatives to assess and take responsibility for its effects on environmental and social well-being. It involves going beyond compliance with legal requirements to voluntarily improve community welfare and the environment.

Social Enterprise: An organization that applies commercial strategies to maximize improvements in human and environmental well-being. These businesses prioritize social impact over profit, often reinvesting earnings into their mission-driven goals.

Carbon Footprint: Measures the total greenhouse gas emissions caused directly or indirectly by an individual, organization, event, or product. It is typically expressed in equivalent tons of carbon dioxide (CO₂e). Reducing the carbon footprint is crucial for mitigating climate change and promoting environmental sustainability.

Company Overview: Tower 28 Beauty

Tower 28 Beauty, founded in 2019 by Amy Liu, is a clean beauty brand based in Santa Monica. The company specializes in creating high-performance beauty products designed for sensitive skin, adhering strictly to the National Eczema Association's ingredient guidelines.

Financial Performance and Growth

Tower 28 has demonstrated impressive growth since its inception:

  • Expected 2024 revenue range: $30 to $50 million

  • Projected global offline distribution points for 2024: Approximately 1,750

  • Expanded to all Sephora stores (600+) with branded endcaps nationwide by the end of 2024

Financial Summary (Based on Pitchbook Data)

  • Total Funding: $5.5 million (as of last funding round in 2022)

  • Key Investors: Monogram Capital Partners, Unilever Ventures

  • Valuation: Estimated at $100-150 million (2023)

  • Year-over-Year Growth: 300% (2021-2022)

  • Retail Presence: Available in over 800 stores globally

  • E-commerce: 60% of sales through direct-to-consumer channels

Triple Bottom Line Alignment

Tower 28 Beauty aligns well with AMDP's investment criteria, demonstrating a commitment to the triple bottom line:

People: The brand focuses on inclusivity and accessibility, catering to all skin tones, types, and sensitivities. As founder Amy Liu states, "Tower 28 is the first and only beauty brand to 100% follow the National Eczema Association's ingredient guidelines".

Planet: Tower 28 is committed to sustainability, having achieved Climate Neutral certification for 2022. The company also pledged to transition its packaging to at least 50% PCR (post-consumer recycled plastic) by 2023.

Profit: With a projected revenue range of $30 to $50 million for 2024, Tower 28 demonstrates strong financial performance and growth potential.

Corporate Social Responsibility

Tower 28 demonstrates a commitment to corporate social responsibility through various initiatives:

  • Partnering with environmental nonprofit Heal the Bay for ocean conservation

  • Donating 100% of gross profits from their Rescue Tee sales on Earth Day to support ocean conservation

  • Focusing on diversity and inclusion in the beauty industry

Innovation and Market Position

Tower 28 has carved out a unique position in the clean beauty market:

  • Primary distribution channel: Prestige

  • Key retail partnership: Sephora

  • Focus on sensitive skin-friendly, clean beauty products

As Amy Liu explains, "I saw this white space as an opportunity and launched Tower 28 in 2019 as a clean beauty company designed for sensitive skin and inclusive of all skin tones, skin types, budgets, and beauty philosophies".

Expert Opinions

  1. Better Goods commends Tower 28 for its stringent ingredient standards and sustainability efforts. The brand's avoidance of excess packaging and use of FSC-certified paper are highlighted as positive practices. However, the reliance on recycled plastic, while better than virgin plastic, is noted as an area with room for improvement.

  2. Good On You Directory rates Tower 28 Beauty's sustainability efforts as "It's a start," indicating that while the brand has made commendable strides, there is potential for further enhancement in its environmental initiatives.

Recommendation

Based on Tower 28's strong financial performance, commitment to sustainability and social responsibility, and unique market position, I recommend that AMDP consider investing in Tower 28 Beauty. The company's alignment with our triple bottom line criteria, coupled with its impressive growth trajectory and innovative approach to clean beauty, makes it an attractive investment opportunity.

However, as with any investment, we should conduct thorough due diligence, particularly focusing on the company's long-term sustainability strategies and ability to maintain its growth trajectory in the competitive beauty market.

















Works Cited

Elkington, John. "Enter the Triple Bottom Line." The Triple Bottom Line, Routledge, 2013, pp.

23-38.

Carroll, Archie B. "Corporate Social Responsibility." Organizational Dynamics, vol. 44, no. 2,

2015, pp. 87-96.

Dees, J. Gregory. "The Meaning of Social Entrepreneurship." Duke Innovation &

Entrepreneurship, 30 May 2001.

Wiedmann, Thomas, and Jan Minx. "A Definition of 'Carbon Footprint'." Ecological Economics

Research Trends, vol. 1, 2008, pp. 1-11.

"Tower 28 Future50 2024." BeautyMatter, 2024,

beautymatter.com/articles/tower-28-future50-2024.

"About Us." Tower 28 Beauty, www.tower28beauty.com/pages/about-us.

"Best Sustainable Clean Skincare Beauty Brands to Shop for Earth Day." Observer, 22 Apr.

2023, observer.com/2023/04/best-clean-sustainable-skincare-brands/.

"Tower 28 Beauty Brand Review: Are They Clean & Conscious?" Better Goods,

bettergoods.org/tower-28/.

"Tower 28 Beauty - Sustainability Rating." Good On You,

directory.goodonyou.eco/brand/tower-28-beauty-beauty.

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