Dollar Shave Club (DSC), founded just 5 years ago, has been acquired for a reported $1 billion in cash by U.K. based Unilever. DSC was launched in March 2012 by Mark Levine and Michael Dubin and is based in Venice, California which is next to Santa Monica outside of Los Angeles. Michael Dubin will continue to serve as CEO of DSC. Unilver approached Dollar Shave Club about the acquisition, according to Dan Primack of Fortune.
Dollar Shave Club had a simple concept that resonated with men, "Shave Time, Shave Money", and launched with a YouTube video that immediately became a viral hit. As of today, it has been viewed nearly 23 million times.
If the price is accurate, it will be one of the largest in e-commerce history, with the most expensive acquisition being Zulily in 2015, purchased by Liberty, owner of QVC, for $2.4 billion. DSC had 15% of the men’s razor cartridge market share in the U.S. last year, according to investor David Pakman who is a Partner at Venrock, which was the original investor in Dollar Shave Club. DSC received $163.5 million in 5 Rounds from 21 investors prior to the acquisition.
Michael Dubin, founder and CEO of Dollar Shave Club, added: “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.”
The company in less than 5 years has not only transformed the shaving category but has singlehandedly supercharged the consumer products subscription category. DSC has over 3.2 million members with revenue of $152 million in 2015 and on track to exceed $200 million in 2016. The Dollar Shave Club brand has also transformed from a single razor to a multi-products lifestyle brand that includes other branded products such as Wanderer, Big Cloud, Boogies and One Wipe Charlies.
“Dollar Shave Club is an innovative and disruptive male grooming brand with incredibly deep connections to its diverse and highly engaged consumers,” said Kees Kruythoff, President of Unilever North America. “In addition to its unique consumer and data insights, Dollar Shave Club is the category leader in its direct-to-consumer space. 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.”
Using Digital Disruption to Establish a Direct Customer Relationship
David Pakman posted this slide from the original Series A Dollar Shave Club Pitch Deck saying "His plan was grand, but his formula was simple..."
"I've been telling the Dollar Shave story lately as a way to describe the disruption possible when a company uses digital technology to establish a direct relationship with a customer," said Ted Schadler in his blog. Ted is Vice President & Principal Analyst at Forrester Research. "Dollar Shave Club is in its customers' daily shower and conscientiousness. It's a digital disruptor, not because it has a revolutionary product, t's because it has a revolutionary relationship." He adds that digital disruption starts with a direct customer relationship.
"In the age of social media, brands must become direct-to-consumer in order to know their own customers," said Pakman in a blog post giving his insider take on the business. "Success has many fathers, but in this case, there is only one."