Sydney startup Aglow raises $1.25m as its beauty industry membership model gains traction

Launched in May last year by co-founders Karl Margrain and Jo Blundell, Aglow is already being used by more than 600 salons and clinics that currently service over 5,000 members in Australia and New Zealand.

Aglow says these salons are currently generating more than $16 million annually in salon membership payments, leading the startup to apply the latest capital raise to help expand into the US.

The funding round was led by Icehouse Ventures and Brand Fund, with strong support from existing investors including fintech entrepreneur Haig.

Ryan Baker, founder of beauty-tech SaaS (Software-as-a-Service) platform Timely, has also joined the shareholder register bringing his own industry expertise to Aglow’s investor base.

“We’re thrilled to back aglow and this brilliant team as they scale their mission, changing the businesses and lives of beauty business owners,” says Simon Pound, managing partner of Previously Unavailable Brand Fund.

“We have seen how creating recurring revenue for these mainly female-led businesses allows owners to get mortgages, growth financing and achieve higher valuations for their businesses, while at the same time providing their clients a more convenient way to pay and receive member benefits.

“It’s a true win-win and we look forward to seeing aglow continue to make beauty memberships the new normal.”

Aglow says its membership model aims to drive increased customer loyalty for beauty industry operators while delivering a more predictable revenue base for the sector which typically operates on a pay-as-you-go model.

"This $1.25 million funding round is a significant milestone for Aglow," says Margrain, the CEO of Aglow.

"It will accelerate our mission to transform financial stability for beauty businesses.

“We're excited to expand our impact across Australia and New Zealand, and this investment paves the way for our entry into the United States market.

“Our goal is to empower more beauty professionals with the tools they need to build predictable, growing revenue streams through memberships."

Drawing on his experience in the fitness sector, Margrain struck the idea of memberships for the beauty industry after launching payments platform Payleadr in 2019. He teamed up with beauty-tech expert Blundell to create Aglow, said to be the first platform dedicated to beauty membership.

“With Aglow, we have created a new category, and we are seeing our customers achieve phenomenal success with the membership model,” says Margrain.

“A number are already generating more than $1 million in recurring revenue from Aglow customers alone, which is huge, and a testament to the business model.

“It’s akin to a gym membership; 30 years ago, gyms were predominantly pay-as-you-go, like beauty is today.

“Now, the recurring payment membership adoption across gyms is close to 100 per cent. This membership movement we’re leading will be as impactful for this industry as gym memberships have been for the fitness industry.”

Blundell, who is Aglow’s chief revenue officer, brings more than 15 years’ strategic and operational experience in beauty-tech and SaaS startups through her experience at Xero, Timely and CarbonCrop.

"I'm excited to bring insights from a decade of experience in beauty-tech to help support this operational transformation within salons and clinics,” says Blundell.

“Our membership platform equips salon owners with the tools to build sustainable, profitable and valuable businesses through a singular focus on building exceptional client experiences."

Aglow says data it has collected over the past six months shows that salons utilising the software have seen members spend 88 per cent more on retail products, while rebooking at a rate 42 per cent higher than non-members and achieving an overall annual spend 45 per cent higher than non-members.