20 July 2016

ACQUIRE - Unilever Buys ECommerce Startup Dollar Shave Club

Dollar Shave Club's 3.2 million members generate US$1 Billion Cash (US$312/Member)

Unilever logo
According to a twitter report by Forbes reporter Ryan Mac, Unilever, the $130 billion dollar multinational consumer goods company, is paying $1 billion cash, for the startup Dollar Shave Club. While the details are still emerging, this transaction is likely to be the third largest ever in e-commerce. The other higher dollar transactions are zulily and Wayfair.

Venture capital providers Venrock, along with other other well known investors Andreessen Horowitz, Battery Ventures, and KPCB, have provided the capital for Dollar Shave Club’s growth. However, Battery Ventures and KPCB won’t benefit from the sale to Unilever since they exited earlier. The others are likely to see a true venture return of up to 10X investment.

Dollar Shave Club (DSC) has grown to become a dominant player in the male grooming business since its founding in 2012. Although best known for a shaving service, DSC also markets wash, skincare and styling products to its male club members. The company's revenue was $153 million in 2015 and there is an expectation it will top $200 million during this fiscal period. Other published information suggests this transaction will represent the largest multiple for a e-commerce startup in history.

DSC's 3.2 million members should be a valuable addition to Unilever, increasing the company’s exposure to a growing demographic as well as adding valuable client data. Unilever offers Dollar Shave Club the ability to plug into existing international marking and distribution channels.

Apparently, Unilever does not have plans to make any executive changes meaning DSC’s CEO, Michael Dubin will continue into the future.

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