Subscription-based start-ups are proving a hot commodity in the beauty world, with major corporation Unilever continuing to expand with an acquisition of this style of business. The company’s latest purchase is Dollar Shave Club – a start-up built around the purchase of inexpensive razors.
The five-year-old company was sold to Unilever in a deal that is rumoured to be worth $US1 billion. Dollar Shave Club is a direct-to-consumer subscription razor blades service (and now male skincare and shaving products) which functions solely online. As The New York Times comments: “Buying Dollar Shave Club gives Unilever a strong entrance into the direct-to-consumer online sales space.”
Unilever’s North American operations president Kees Kruythoff comments: “Dollar Shave Club is an innovative and disruptive male grooming brand with incredibly deep connections to its diverse and highly engaged consumers. In addition to its unique consumer and data insights, Dollar Shave Club is the category leader in its direct-to-consumer space.”
Founder Michael Dubin adds: “D.S.C. 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.”
An early investor of the start-up, David Pakman of Venrock Partners, says the investment was a gamble that has paid off. He comments: “It was hard to raise capital for this company. Many leading firms passed multiple times” but says the new purchase has represented a return of 10 times the original value for his firm.
