Anglo-Dutch food and consumer products giant Unilever today said it had bought the Dollar Shave Club, a US start-up that has shaken up the market with its subscription model.
Unilever did not disclose the price paid for the California-based company, but both Bloomberg News and Fortune magazine reported it was around USD 1 billion (910 million euros), or about five times its projected revenue this year.
Founded in 2012, Dollar Shave Club has quickly "grown into a full male grooming business that has transformed the shaving category with its lifestyle brand empowering 3.2 million members", said Unilever in a statement.
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The company offered US men an alternative to increasingly expensive blades sold in stores with its subscriptions over the internet that delivered a month's worth of twin-blade razors for as little as USD 1 plus shipping.
Multi-blade models can be had for under USD 10 including shipping and the company now offers a range of men's personal care products.
Dollar Shave Club will give Unilever a boost in the men's razor market.
Although active in more than 190 countries with a stable of household brands, including Lipton tea and Knorr soups, Unilever has few in the men's personal care segment.
In fact Dollar Shave Club, although available only in the United States, Australia and Canada, already has a higher share of the global men's shaving market than Unilever, according to data from Euromonitor International.
"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," said Kees Kruythoff, president of Unilever North America.
Unilever will have a long way to go before challenging the global dominance of Proctor & Gamble and its Gillette brand in the men's razor segment, however.
According to Euromonitor International data, Proctor & Gamble held 56 per cent of the nearly USD 15 billion global men's shaving market last year, compared to 0.9 per cent for Dollar Shave Club and 0.5 per cent for Unilever.
In the US, Dollar Shave Club was in fourth place last year with USD 128 million in sales, compared to over USD 1.6 billion for Gillette.
Unilever said that Michael Dubin, the founder and chief executive of the Dollar Shave Club, would stay in his post.
"DSC couldn't be happier to have the world's most innovative and progressive consumer-product company in our corner," Dubin was quoted as saying in the Unilever statement.
