Ami Colé Is a Sign of a Broken System for Black Beauty Founders

“Overwhelmed.”

That is how Diarrha N’Diaye-Mbaye describes feeling after publicly announcing that Ami Colé, the Senegalese-inspired “clean” beauty brand she founded in 2021, was closing on July 17.

It was also a whiplash for customers of the brand and fellow founders. The line is carried in more than 600 Sephora stores and closed a fundraising round just nine months ago with participation from L’Oréal. Its $20 Lip Treatment Oil and $32 Skin-Enhancing Tint were fixtures in celebrity makeup bags, and on the pages of top glossy magazines. N’Diaye-Mbaye also grew up in beauty, cutting her teeth at L’Oréal and Glossier.

“An early stage startup is always going to be a risk, but no one had the answer to how to scale a diverse, melanin-rich brand … Everyone said it couldn’t be viable if we didn’t widen the aperture and change our positioning,” N’Diaye-Mbaye told The Business of Beauty.

Despite its trappings of success, including prime placement in Sephora, boldfaced investors and broad cultural impact, Ami Colé was indeed a small business, generating just over $3 million in revenue at its peak. It was also exposed to all the elements that young, independent brands typically are, from unpredictable demand forecasting, intense competition and stakeholders keen to see a fast return. But as a Black-founded brand, with an outsized cultural impact, Ami Colé was also expected to be tougher than the rest, despite operating in a climate that still sees products for skin of colour as “niche”.

“[Black founders] are expected to deliver the output of an integrated society whilst still living in the reality of a segregated society,” said Sharon Chuter, founder of the prestige line Uoma Beauty, who is currently suing the new owners of the brand, MacArthur Beauty LLC and Braintrust, alleging that it was sold at a distressed price without her knowledge.

N’Diaye-Mbaye said Ami Colé closed because it could not sustain the cost needed to outmanoeuvre competitors, especially as it tried to diversify and attract both customers with lighter skin tones and Black and brown customers in less cosmopolitan areas of the US, its core market.

“It became very chicken-and-egg. Do we stop doing paid media to conserve cash, or do we invest more in influencer marketing to grow?,” said N’Diaye-Mbaye.

The brand installed a new chief executive and financial officer in January, and while it managed to cut costs, it failed to raise fresh investment or find a buyer, resulting in the decision to close in July.

Its shuttering isn’t just another cautionary tale about the struggles of Black founders in beauty. It’s a new proof point: even when credentialed founders follow the standard launch-and-scale playbook to the letter, they still face career-ending roadblocks and impossible standards.

The Promise of Opportunity

Having raised more than $1 million between 2020 and 2022, Ami Colé, like other Black-founded brands, expected further capital would be readily accessible. It was not.

A harsher political climate — including the Trump administration’s crackdown on grants earmarked for marginalised founders — and a more volatile macroeconomic backdrop, marked by trade wars, geopolitical tensions, consumer fatigue and slowing spending, have prompted venture capital firms to scrutinise their investments more rigorously than they did in 2020.

Dija Ayodele, founder of the education platform Black Skin Directory and author of “Black Skin,” said many investors at the time were writing checks to signal alignment with values-driven rhetoric.

“They were not stress-testing brands enough,” she said. “There was a lot of guilt with the finances that they were giving out. …They were giving enough for you to shut up.”

There was also a disconnect between what was perceived as the total addressable market for Black customers in beauty. That strong spending by Black American consumers — who spent $6.6 billion on beauty in 2021, per McKinsey & Company — was automatically supposed to translate into gains for Black-owned brands. Reaching those customers is tricky, founders say.

“Skin of colour doesn’t make you a niche shopper, but retailers try to make you shop like a niche shopper,” said Chuter.

Expanding a customer base with an inclusive core message can be challenging for brands, retailers, and investors alike — especially when market data lacks nuance. “I could be Black and want Dior … our [retail] environment has created a very complicated mismatch,” she added.

Many Black-owned brands have been successful at building buzz in cosmopolitan cities like Los Angeles and New York, but they often struggle — or overlook the need — to replicate that success in other regions of the US, said Tomi Talabi, founder of The Black Beauty Club.

“In order to actually grow your audience you need to be activated in regional places like Dallas, Chicago and Atlanta,” Talabi said. “Being strong in New York and maybe in LA isn’t enough to reach the growth metrics investors expect.”

The Path Forward

As companies of all sizes struggle in today’s macro environment, Black brands face a double edged sword: having consequential meaning to their communities and customers and also needing to operate within conventional standards. Experts say that operating a values-based organisation can add undue scrutiny.

Patient investors, who are willing to look beyond growth at any costs, is the unlock for Chuter.

“You need investors who don’t put pressure on you to make unnecessary compromises really early,” she said, adding that many brands rush into retail at their investors’ behest. Ami Colé launched into Sephora just shy of a year after launching direct-to-consumer; Uoma launched into Ulta Beauty and Selfridges the same month it opened its business.

Insiders like Ayodele caution that venture capital funding may not be right for many emerging Black beauty founders in the first place, and encourage them to also consider alternatives — like family offices, grants, angel investors or small business loans — while focusing on slower, more sustainable growth.

N’Diaye-Mbaye said she still wants to encourage founders to try to build businesses — reminding them their work may be more impactful than they realise — but acknowledged that the current climate presents an uphill battle.

“It’s great that Black-owned brands are being carried in big retailers, but are they being set up to be productive? What metrics are [they] going to be held against?,” she said. “Are you going to be held against brands that are starting with $20 million?”

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