Covalo, a Zurich-based platform for the personal care industry, has secured a $4 million seed extension to fuel its evolution from an ingredient marketplace into a core data infrastructure. The funding round, led by Hi inov with participation from existing investors, coincides with the company's five-year anniversary. This strategic pivot aims to create a shared system of record for an industry grappling with data fragmentation.
Addressing Industry-Wide Data Fragmentation
The personal care sector faces significant challenges due to dispersed and unstructured ingredient data, which hampers innovation. A single product formulation requires managing dozens of raw materials, each accompanied by numerous documents for safety, compliance, and technical specifications. This complexity creates major inefficiencies for research and development, regulatory, and procurement teams across the industry.
Currently, critical information is scattered across disparate systems, emails, and PDFs, lacking a standardized format or nomenclature. This fragmentation forces teams to spend excessive time on manual data management and compliance tasks instead of focusing on product development. The lack of a common foundation makes it difficult to streamline workflows and collaborate effectively with suppliers.
A Strategic Shift to a Centralized Data Backbone
Covalo is addressing these issues by transitioning into a centralized data backbone that connects directly to supplier and brand systems. The platform aims to replace outdated data exchange methods with a single, structured layer where information is entered once and reused everywhere. This creates a unified source of truth for all stakeholders involved in the product lifecycle.
Co-founder Timo von Bargen emphasized that while ingredient discovery was the starting point, the industry truly needs a shared system of record. When a supplier updates a compliance document on Covalo, all brand partners receive the update instantly, integrating structured data directly into their workflows. This compounding effect drives efficiency that standalone tools cannot replicate, according to the company.
Navigating Regulatory and Market Pressures
The urgency for such a platform is amplified by mounting regulatory pressures, including the EU Green Deal and new microplastics rules. These mandates, combined with rapidly changing consumer demands for sustainability, are compressing product reformulation timelines significantly. Covalo estimates that these forces will require approximately 80% of all personal care products to be reformulated by 2030.
This impending wave of reformulation will generate an enormous increase in the volume and complexity of ingredient data that companies must manage. Without a shared and structured data foundation, the industry's ability to adopt artificial intelligence and advanced digital workflows at scale is severely limited. The quality of AI-driven insights depends directly on the quality and accessibility of the underlying data.
Fueling Future Growth and AI Innovation
The new $4 million in capital will be instrumental in advancing Covalo's vision for an AI-ready industry. Funds are earmarked for expanding enterprise offerings in key markets and strengthening the platform with full product information and master data management capabilities. A key focus will be the introduction of new industry-specific AI agents to automate critical processes.
These AI tools will target workflow automation for RFIs and RFPs, data extraction, and regulatory compliance checks, among other applications. The company's strategy is supported by strong performance indicators, including a 145% net revenue retention rate and partnerships with key organizations like TraceOne. This momentum demonstrates growing market validation for its infrastructure-focused approach to solving industry challenges.
This latest funding round marks a pivotal moment for Covalo, solidifying its transformation from a discovery platform into essential data infrastructure for the personal care sector. By creating a common data backbone, the company aims to streamline operations, reduce inefficiencies, and unlock new possibilities for digital innovation. Covalo is positioning itself to power the industry's transition toward a more connected, efficient, and AI-driven future.