Back with a long overdue edition of Beauty Bytes! Here are some quick updates on what we’ve been up to at IRI-Sys

Picture this: you log onto your laptop to start the workday. Claude has already scanned your calendar, pulled the last three conversation notes from your CRM on the team you're meeting with in an hour, flagged the open action item on Asana (or whatever task management tool you use) from six weeks ago you forgot to follow up on, and surfaced a brief summary in your inbox. This took zero minutes of your time.

A concrete shift I've noticed in my work is that I'm spending more of my time inside AI platforms like Claude and Codex, and less time logging into the individual apps I use. My calendar, Gmail, CRM, and even beehiiv (which powers this newsletter) can now connect directly to my Claude.

Up until very recently, humans were the connective tissue between software.

If you had a task that spanned multiple tools, you were the one carrying context between them. You'd log into each platform, remember the relevant info in your head, and connect the workflow. By connecting your tools to an AI system like Claude, it then becomes the glue, carrying out multi-step workflows and tasks across several apps.

What makes this possible is something called the Model Context Protocol, or ✨MCP✨

Think of it as the USB-C of AI: a universal connector that replaces the need for a custom integration every time an AI tool needs to communicate with an external app. It allows AI to discover and use software tools the same way a human would, reading data, taking actions, and updating records.

We are still at the early stages of MCP adoption. As of early 2026, there are over 10,000 active public MCP servers and 97 million monthly downloads. Over the coming months (and years) I believe we will see more and more companies releasing their own MCP tools.

If no one is logging in anymore, won’t usage of the apps drop significantly?

I would argue the opposite. Tasks created for agents can be run 24/7 and require more thorough tool usage to ensure reliability. You may know intuitively that Phenoxyethanol is restricted to 1% in the EU/UK, but the agent will check every time without taking shortcuts.

As an example, while I rarely log into my CRM anymore, overall usage has gone up significantly since I created tasks for my meeting & client prep.

How do we get there?

Without getting too technical, there are two distinct challenges businesses need to work through before any of this becomes real. The first is on the software side: applications need to redesign themselves to run as backend services that AI can access, which is exactly what we're seeing companies like Salesforce do.

The second, and harder, challenge is trust and governance. Configuring an AI agent to safely act on your behalf across multiple tools means getting permissions right: what it can read, what it can update, and critically, what it is not allowed to touch. Claude can access to your CRM can view records, but it can also delete them. These guardrails require a deep operational understanding of how your business actually works, not just how the software works.

Getting this right, defining what agents are allowed to do, auditing their actions, and maintaining human oversight on decisions that matter, is where I expect most companies to spend the bulk of their resources over the next two or three years. This is especially true in a regulated industry, where an incorrect record or a missed update can carry real compliance consequences.

As the MCP ecosystem matures, we're actively exploring what it would mean for beauty companies' AI tools to connect directly to IRI-Sys, querying ingredient data, running compliance screens, and managing raw materials without opening a browser. Which parts of regulatory work are appropriate for full agent autonomy? Where does human oversight remain non-negotiable in a highly regulated industry? We don't have complete answers yet, but we think the beauty industry needs to start asking these questions now.

I would love to hear your take on this. Email me at [email protected].

Though you haven’t heard from us in a while, the deal machine keeps chugging along. Despite all the global uncertainty, the public markets are at an all-time high and the private checkbooks are fluttering around, too. Enjoy this week’s summary of a litany of broken mega mergers, private equity carveouts of public companies, and corporate investments, amongst others.

Let’s dive in:

Estée Lauder (NYSE: EL) and Puig (BME: PUIG) have terminated merger talks that would have created a roughly $40B premium beauty group, ending a tie-up that would have combined Estée’s Clinique, MAC, and Tom Ford Beauty with Puig’s Charlotte Tilbury, Carolina Herrera, Rabanne, and Byredo.

The talks appear to have broken down more over structure than price, with Reuters and the FT pointing to governance frictions between the founding families, investor concern around complexity and timing, and complications tied to partially owned assets, especially Charlotte Tilbury.

Estée Lauder shares jumped more than 10% after the deal was scrapped, while Puig shares fell about 13%, suggesting investors were more relieved that Estée will stay focused on its turnaround than disappointed by the lost combination.

Bridgepoint Group has agreed to acquire Obagi Medical from Waldencast (Nasdaq: WALD) for up to $460M, including $400M upfront plus up to $60M in earnout, in a deal that values the clinical skincare brand at about 2.8x 2025 revenue and roughly 18.6x adjusted EBITDA based on Waldencast’s disclosed figures.

Obagi generated $161.6M of 2025 net revenue and $24.8M of adjusted EBITDA, and the sale gives Waldencast a meaningful balance-sheet reset, with the company saying it expects to be net cash positive at closing and to focus going forward on Milk Makeup. Learn more.

Proya Cosmetics (SHA: 603605) has increased its stake in Flower Knows to 51% by acquiring an additional 12.6% from founder Yang Zifeng for RMB 351m ($51.6m), giving the Chinese beauty group control of the brand and allowing it to consolidate Flower Knows into its financials. The deal values Flower Knows at roughly RMB 2.8B ($416M), or about 10x 2025 earnings, and follows Proya’s earlier 38.5% investment last fall. Learn more.

Align Ventures led California Naturals’ Series B, with existing backer Elizabeth Street Ventures also participating, bringing the brand’s total funding to $40M+ across three rounds.

The company said the capital will fund retail expansion across Target, Ulta, and CVS and support new category launches; alongside the raise, founder Shelby Wild moved to chair and product/brand lead, while former Glossier executive and current COO Hayden Hiatt was named CEO. Learn more.

Wittington Ventures led an oversubscribed $2M seed round in Filament Sciences, with Willow Growth Partners also participating, to fund inventory, salon expansion, and education around the brand’s bond-building haircare platform.

Founder Nathan Puksta had bootstrapped the business until now; Filament launched at Violet Grey in January. Learn more.

Cosmogen, backed by Weinberg Capital Partners, has acquired U.S.-based packaging supplier Asquan, creating the new Cosmogen & Asquan Group with roughly €50M in revenue; terms of the deal were not disclosed. Learn more.

Henkel Ventures has co-led a $4.5M funding round in Ruka Hair alongside Freedom Trail Capital, bringing the UK biotech beauty brand’s total funding to $10M. The round will fund R&D for Ruka’s patent-pending collagen-based alternative to traditional hair extensions, along with toxicology and safety testing, and support a planned U.S. retail launch later this year. Learn more.

e.l.f. Beauty (NYSE: ELF) has transferred ownership of Keys Soulcare back to Alicia Keys, unwinding the lifestyle beauty brand it co-founded with her in 2020. The move was positioned on e.l.f.’s latest earnings call as part of a sharper portfolio focus, allowing management to concentrate on its five growth brands after all five expanded in fiscal 2026, even as the company issued softer-than-expected fiscal 2027 guidance. Learn more.

Silas Capital, Monogram Capital Partners and other existing backers invested an additional $5M into Violette_FR, extending the brand’s 2024 Series B in a still-constrained color cosmetics funding market. The SEC filing indicates the full offering was sold to three investors, and the capital is being used primarily for working capital, a notable insider follow-on at a time when prestige makeup growth remains subdued and mid-sized financings have become harder to place. Learn more.

Aria Growth Partners has taken a minority stake in Good Molecules, the skincare brand co-founded by the Beautylish team in 2019.

Terms were not disclosed, but industry sources cited by Beauty Independent estimate Good Molecules is profitable and generating roughly $100M in annual sales; the deal also fits Aria’s broader thesis around affordable, science-backed skincare, alongside portfolio names like The Inkey List and Ultra Violette.

Aria manages ~$250M in AUM and typically deploys $10M to $40M+ for minority stakes and is known for backing Hero Cosmetics, which exited to Church & Dwight Co., Inc. for $630M at 6.8x sales. Learn more.

Boyne Capital has acquired a majority stake in YZY Fragrances, the fragrance company behind brands including Territoire, Acqua di Parisis, and Insurrection; terms were not disclosed. The deal will back expanded distribution, product innovation, and brand development. Learn more.

Silas Capital has led Ôrebella’s Series A round, with existing investor Celebrands also participating; terms were not disclosed.

The raise comes less than two years after launch and follows rapid retail expansion from Ulta in the U.S. to Ulta Beauty Middle East, where the brand holds the top fragrance position, plus a March rollout into 500 Douglas doors across 20 countries. Learn more.

Sofinnova Partners led an oversubscribed $23M round in P2 Science, a green chemistry ingredients company, with new investors Emerald Technology Ventures and GS Futures joining existing backers including Chanel, BASF, and dsm-firmenich ventures. Learn more.

Story Ventures led a $23.5M funding round in 10Beauty, bringing the robotic manicure company’s total capital raised to roughly $70M. The fresh capital will fund broader deployment of its autonomous manicure machines. Learn more.

Novvia Group, a Kelso-backed packaging distributor, has acquired APC Packaging, a Florida-based supplier of sustainable luxury packaging for premium skincare and cosmetics brands; terms were not disclosed. APC’s founders, Lisa and Christina Lin, will remain in place, and the deal follows Novvia’s 2025 acquisition of Garrett Hewitt as it builds out a larger beauty and personal care packaging platform. Learn more.

KKR has invested $80M in Fresha through its Next Generation Technology Growth fund, valuing the beauty and wellness booking platform at more than $1B and bringing total capital raised to about $285M.

Founded in 2015, Fresha now serves more than 140,000 businesses and processes over 35M appointments per month. Learn more.