L'Oreal has purchased leading beauty tech firm ModiFace for an undisclosed sum to bolster its digital-technology effort, giving it an apparent edge over rivals in augmented reality and artificial intelligence for beauty. Terms were not disclosed.
The 11-year-old Toronto-based company has been providing services for L'Oreal at least since 2014, when Garnier used ModiFace technology to deliver customized digital ads featuring the customer as the model. More recently, L'Oreal Professional and ModiFace introduced an app called Style My Hair, which provides augmented-reality hair color tryouts.
Now ModiFace will become part of L'Oreal's newly formed Digital Services Factory, a network that designs and develops new digital services for the company's brands.
"This really marks the second phase of our digital acceleration," says L'Oreal Chief Digital Officer Lubomira Rochet. "It's the first time L'Oreal acquired a tech company, a non-beauty brand. So it's really very significant from a strategic standpoint. And what we have in mind with Modiface is to create the heart of our digital research and development."
Modiface in recent years has also been a prominent player in virtual cosmetics tryout apps or chatbots for key L'Oreal competitors, including Estee Lauder Cos. and its Smashbox brand, Allergan, and Coty, for which it developed Clairol's 3-D hair color simulator app last year. Retailer Sephora is among other brands using the 200 beauty apps ModiFace has developed for more than 80 brands.
"All commitments with existing customers will be fulfilled," Rochet says. But it's less likely that either L'Oreal or competitors will want to make new deals. ModiFace's primary mission will be developing digital capabilities for the 34 international brands in L'Oreal's $36 billion world-leading beauty business. ModiFace has nearly 70 engineers and 30 registered patents.
Developing partnerships with other tech players also will be a priority for Modiface. Rochet points to Samsung, whose new Galaxy S9 phone uses ModiFace technology, she says.
While ModiFace holds a slew of patents, it's not the only player in the burgeoning augmented-reality cosmetics space. Coty, for example, turned to YouCam Makeup last year for an app-free in-browser Makeup Mirror tryout tool that can be used in stores or with mobile devices.