Hermo works directly with brand owners and distributors to sell affordable cosmetics and skincare products to women, while offering fashion insights and beauty tips.
Istyle, which is listed on the Tokyo Stock Exchange, runs cosmetics portal Cosme.
Gobi didn’t disclose the details of the deal, except that it exited the company for an internal rate of return of 91 percent.
However, a Reuters report earlier quoted Istyle as saying it would buy a 60 percent stake in Hermo from the Shanghai-based VC for US$13.2 million. A spokesperson for Gobi confirmed the report was correct.
Gobi, which partners with Malaysia Venture Capital Management Bhd (MAVCAP) for investments in the country, was the sole investor in Hermo’s US$2 million series A round in October 2015. It said it decided to strike a deal with Istyle seeing the latter’s track record in creating successful international companies and its strategic positioning for the North Asian market.
“We have been in discussion with Istyle for a follow-on investment in Hermo since last year, and as the conversation deepened, it turned out that an acquisition made more sense as it came across as the most effective way to work on achieving our common vision. Hermo’s strong presence in Malaysia was also a major contributing factor,” said Gobi partner Kay-Mok Ku.
“I would like to wish the Hermo team greater success ahead as they scale up in other Southeast Asian markets,” he added.
With Gobi on board, Hermo has achieved a 300 percent year-on-year growth in 2016 revenue.
MAVCAP was also encouraged by the deal – its first exit for the year. CEO Jamaludin Bujang said, “it shows the potential of what can be achieved for Malaysian startups if we continue our work with venture capital firms such as Gobi Partners. Our local companies can go international.”