Unilever purchases Dollar Shave Club For $1B

Dollar Shave ClubWhile it hasn’t been officially announced, sources have confirmed to several media outlets that Dollar Shave Club has been purchased by Unilever for a staggering $1 billion.

The shaving company has become a very popular and fast growing one. It is proof of concept for the power of online subscription startups, where a monthly price is paid for a tangible product, based entirely on the web.

Quick Rise

Their popularity was almost immediate. After raising more than $160 million in venture capital, they launched and consistently beat projections. They claim to have reached more than 23 million people in that time, allowing them to secure another $75 million in funding.

It was no surprise when Unilever decided to buy out the startup. But the terms might be a bit more of a shock. They have agreed to a purchase of the company for $1 billion cash. In addition, CEO Michael Dubin will retain his position, and the company will continue to run as a separate entity, retaining independent status.

Unilever Stocks Soar

After news got out about the purchase, Unilever stocks jumped up 0.30% to $47.12 per share. It shows a positive change for the company, who saw sharp drops in stock prices back in January of this year.

With the acquisition of Dollar Shave Club, Unilever is expected to take a fair chunk of the razor market. Proctor & Gamble, which once help the majority of product sales in the area, are continuing to lose business to the European company. This is doubtlessly going to increase those losses.

The Future Of Dollar Shave Club

So, what is next? Unilever North America President Kees Kruythoff says that the daily operations won’t be changing.

“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.”

As for Dollar Shave Club, it is obviously an exciting and positive move for the startup, which is now one of the most successful to ever launch online.

“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,” Michael Dublin said in a statement earlier this week.

I have actually used Dollar Shave Club for a couple of years, and I am a little sad about this buyout. Often companies claim that operations will remain the same, but it isn’t long before products weaken, or go on sale in physical stores with a serious markup.

Source: Nasdaq

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