South Korea’s booming cosmetics sector has captured the attention of private equity firms, with 18 deals totalling KRW2.3tn ($1.6bn) recorded in 2024, according to Bloomberg. 

The sharp rise in M&A activity comes as the country becomes the top cosmetics exporter to the US, overtaking France.

Strong US demand, powered by K-pop and K-drama-driven brand visibility, has positioned South Korean beauty startups as prime private equity targets. Annual cosmetics exports hit a record $10.2bn, up from $7.5bn in 2020, according to the Korean Ministry of Food and Drug Safety.

Recent transactions include Archimed’s acquisition of skincare device maker Jeisys Medical and KL & Partners’ reported interest in Manyo Factory, known for its product placement in hit drama Crash Landing on You.

Bain Capital, which acquired Classys in 2022 for KRW670bn, is exploring a potential sale. The firm has a track record of high-profile exits in the sector, including Hugel for $1.5bn and Carver Korea for $2.7bn.

COSRX, acquired by Amorepacific in 2023, generated nearly 60% of its revenue from the US and Europe, fuelled by the viral success of its snail essence serum. Other brands, such as Tirtir, have also gained traction on platforms like TikTok and Reddit.

The market shift comes amid weakening Chinese demand and global brand challenges. Estée Lauder has forecast declining sales, while Shiseido faces headwinds in China. In contrast, South Korean companies such as Kolmar Korea and CJ Olive Young are expanding their North American presence.

As K-beauty continues to grow globally, particularly in the US, private equity firms are expected to remain active dealmakers in the space.