Dollar Shave Club, the start-up that took on the established male grooming companies, has been purchased by Unilever for a reported $1bn.
Founded in 2012 by entrepreneur Michael Dubin, the Dollar Shave Club was marketed as an attempt to break Gillette’s dominance of the male grooming market promising to sell blades to customers at a cost of $1 per month.
Noticing a drop-off in sales after the new entrant appeared, Gillette launched its own Shaving Club over a year ago which proved somewhat successful in winning back customers.
Gillette, owned by Proctor & Gamble, even went as far as taking Dollar Shave Club to court last year, claiming the start-up infringed on hundreds of its patents
Dollar Shave Club gained international attention following its launch for a comical YouTube video that quickly went viral, and the company currently counts 3.2m people as customers.
In an announcement, Unilever revealed it has purchased Dollar Shave Club because of its strong direct-to-consumer business, making it one of the first instances of the major multinational moving into male grooming products.
Dubin to remain as CEO
While Unilever did not disclose the financial terms of the deal, sources close to Fortune claim the fee was close to $1bn, with Dollar Shave Club being the one approached to make a deal.
As part of the deal, Dubin will remain CEO of the company – which has yet to make a profit – but will work under the Unilever umbrella.
“Dollar Shave Club couldn’t be happier to have the world’s most innovative and progressive consumer-product company in our corner,” said Dubin of the deal.
“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.”
Kees Kruythoff, president of Unilever North America, added: “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.”
Razor blade image via Shutterstock