It did not disclose financial terms.

ModiFace specialises in augmented reality and artificial intelligence applied to the beauty industry, an area L'Oreal and other peers have been developing as their online sales grow and customers increasingly follow cosmetics trends on social media.

The Toronto-based firm employs nearly 70 engineers, researchers and scientists who have submitted more than 200 scientific publications and registered over thirty patents, according to a statement.

"With ModiFace we've acquired ... the stock of inventions they've already created, but more than that, the ability to look at reinventing the beauty experience in the years to come," said L'Oreal's chief digital officer Lubomira Rochet.

L'Oreal, the world's biggest cosmetics company, made around 8 percent of its sales online in 2017, from just over 5 percent in 2015.

It has already launched tech-savvy items such as sensory brushes that tell you how to care for your hair, or phone apps for virtual testing. Earlier this year, it rolled out a "Style My Hair" application developed with ModiFace allowing people to see how they would look with different coloured dyes.

ModiFace's technology also extends to services such as skin diagnosis.

L'Oreal now spends 38 percent of its media budget on digital campaigns. It has also launched programmes to collaborate with start-ups in cities such as Paris, London and San Francisco.

(Reporting by Dominique Vidalon and Sarah White; Editing by Mark Potter)