Billion Dollar Shave Club: Unilever buys razor subscription service

Unilever has bought U.S. start-up Dollar Shave Club for a reported $1bn (£764m) in cash as it looks to further expand into the male grooming business.

Subscription startups like Dollar Shave Club (acquired Tuesday by global consumer products giant Unilever for a reported billion in cash), Harry’s and others have nicked stalwarts like Procter & Gamble, Unilever and Schick.

Venice, California-based Dollar Shave Club has used advertising that pokes fun of the high price and overly technical nature of branded razor blades to boost its sales, which have grown from $4 million in 2012 to $152 million a year ago. While specific financial terms of the deal were not disclosed, it’s been said that Dollar Shave Club chief executive Michael Dubin will remain in his position.

The firm, founded by boss Michael Dubin in 2012, is a subscription service which sends out new blade cartridges every month for as little as $1 and has 3.2 million customers. “I was freaked out that maybe we wouldn’t recover from our success”, says Dubin, after the site crashed thanks to the video’s unanticipated popularity.

Dollar Shave Club holds 54% of the online shaving marketing in the USA, according to Euromonitor, and 5% of the total shaving market.

Mr. Dubin said he was talking with Unilever about an investment before deciding to sell the business. The Wall Street Journal quoted Unilever’s North America president, Kees Kruythoff, as saying that this represents “unique consumer and data insights“.

Dollar Shave Club is accustomed to selling directly to consumers; Unilever, of course, is accustomed to people shopping for its brands in drug stores or in supermarkets. P&G declined to comment. Among its best known stable of brands are Dove, Axe, Lipton and Ben & Jerry’s. On top of that, Unilever gains access to a wealth of information, because Dollar Shave Club has a direct link to the actual consumer. “Will they start to invest in creating their own startup brands or is it worth purchasing smaller companies that they can further grow?”

Now, the upstart will be backed by the deep pockets and vast scale of Unilever, a European consumer-products giant with annual sales of almost $59 billion.