Jay-Z backs beauty brand Madison Reed in $33 million investment

Madison Reed Inc. announced a $33 million investment led by Sandbridge Capital, with participation from media mogul Jay-Z’s Marcy Venture Partners.

The company plans to use the new capital to add 20 retail locations and 850 licensed colorists in key hubs including New York, South Florida, California, Chicago, Washington and Texas, according to a statement. It’s also seeking to boost its digital business, and in March hired Dollar Shave Club’s Jose Zuniga as chief financial officer.

Founded in 2013 in San Francisco, the company operates 60 hair salons across the U.S., with services ranging from roots coverage to high-end highlighting called balayage. Madison Reed’s hair color products are sold at Ulta, Ulta at Target, on Amazon, by other retailers, and on its website. The company also has a subscription business. The Series G funding brings the company’s total capital raised to about $220 million.

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On marketing campaigns, the company has worked with influencers, including reality TV star Kyle Richards of “The Real Housewives of Beverly Hills,” and the celebrity hairstylist for Jessica Chastain, whose hair was glossed with Madison Reed for the Oscars, according to the company.

Co-founder and CEO Amy Errett declined to comment on the company’s valuation, but the research firm Pitchbook pegged it at $568 million last September.

The venture capital industry as a whole has been increasing its Series F and G investments, with hundreds of millions of dollars being raised per round, according to Pitchbook. But Errett said her main goal in taking the $33 million investment was to add the expertise of Sandbridge Capital, which has backed consumer companies like The RealReal and Bonobos, and Marcy Ventures, which is an investor in Savage x Fenty and Gopuff, according to Crunchbase. Both investment firms are taking board observer seats at Madison Reed.

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—Bloomberg News