Over the past couple of years, investors and companies have become wary of e-commerce startups, both around the world and back home in India. However, that has not deterred Unilever from reportedly spending a massive $1 billion in cash to buy men’s grooming startup Dollar Shave Club.
Fortune first reported the development citing familiar people with the matter. The companies have confirmed the story via a press release. However, they did not disclose the exact financial details of the deal.
Speaking on -acquisition, CEO and founder of Dollar Shave Club, Michael Dubin said,
DSC couldn’t be happier to have the world’s most innovative and progressive consumer-product company in our corner. We have long admired Unilever’s purpose-driven business leadership and its category expertise is unmatched. We are excited to be part of the family.
From razor blades to complete male grooming segment domination
Michael Dubin started Dollar Shave Club in 2011. Thanks to superior customer service coupled with clever marketing and advertising tactics, DSC became quite popular by selling bundles of razor blades.
Over the past few years, it has expanded to include complete mens grooming solutions. These include men’s wash, skincare, daily wipes, and hair styling products in addition to shaving blades.
The company isn’t profitable yet but Dublin expects that to happen by year’s end. And Unilever can play a huge rule in achieving that by helping DSC in scaling up production and expanding distribution in current products.
Commenting on the same, Kees Kruythoff, President of Unilever North America said,
Dollar Shave Club is an innovative and disruptive male grooming brand with incredibly deep connections to its diverse and highly engaged consumers. We plan to leverage the global strength of Unilever to support Dollar Shave Club in achieving its full potential in terms of offering and reach.
Notably, Unilever has more than 400 brands around the world in Food, Home, and Personal Care category.
It is behind some of the most popular personal care brands like Axe, Dove, and Pond’s. With the acquisition of DSC, it will now have another category of male grooming with the range of DSC’s products.
DSC has raised over $160 million so far in venture capital funding. Last year, it had raised $75 million at a valuation of over $600 million. The startup claims to have 3.2 million users of its service. It earned a revenue of USD 152 million in 2015 and has projected to reach $200 million in 2016.
Post acquisition, DSC will remain an independent entity with Dubin as its CEO. He will, however, report to the trio of Unilever executives. The company will also retain its Los Angeles, CA headquarters. The deal is expected to close in the third quarter of 2016.