Dollar Shave Club Raised Money on AngelList & Just Sold for $1 Billion

Dollar Shave Club Investors Love Us


AngelList is not always pounding the table on the many successful companies that have graced the pages of the accredited crowdfunding platform. But this past week there was a pretty big exit and some AngelList investors were fortunate enough to get in early. Dollar Shave Club sold to Unilever for a reported $1 billion delivering Unicorn status for the disruptive consumer staple company.

Dollar Shave Club first raised Seed capital in the amount of $1 million back in 2012 led by big name VCs Kleiner Perkins and Andreessen Horowitz. Dollar Shave Club went from A round to D round, each progressively higher, to closing the deal with Unilever for a billion dollars. AngelList syndicates were given the opportunity to jump on board for the ride. With this example, the syndicate typically would invest about $270,000 with a minimum participation of just $10,000.

Dollar Shave Club is in many respects a perfect crowdfunding candidate. The company took a commodity product, dominated by several sleepy consumer giants and completely turned the process upside down. Dollar Shave Club delivered innovation where established firms failed to act. They were simply too caught up in their high margin success. Dollar Shave Club jumped out of the gate in 2012 with a video explaining their product of blades that are “F**king great.” The Dollar Shave Club video / advertisement has been viewed OVER 23 million times on YouTube. The concept of an affordable, high-quality product delivered to your doorstep was enough to rattle the cages of Gillette, Bic and more.  Last year Dollar Shave Club claimed about 13.3% of all razor sales in the U.S. and was on track to generate over $200 million in revenue this year.

DOLLAR shave Club What the FAQDollar Shave Club has since expanded its model from just razors to a whole litany of products designed to dominate men’s bathrooms without a trip to the store.

Kees Kruythoff, President of Unilever North America, explained their acquisition;

“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.”

So the company went from zero to a billion in 4 short years.  Along the way, a few smaller (accredited) investors got to join in for the ride. Dollar Shave Club is not only a testament to the success of founder Michael Dubin’s creativity and determination, but it is also a solid validation to the AngelList process.

 


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  • John Smith

    This is a perfect example of the start of another bubble… A company doing $200 million in revenue, even if they have amazing 50% net profit margins, it’s a 10 year return for the $1 billion buyout. It’s these kind of deals that just don’t make sense, and are creating false valuations for many startups.

    • The Stock Ninja

      You’ve missed the point. If a company’s team can go from non-existent to serving over 3% of American’s who use this type of product, can compete in the cut throat industry of shaving products, and be growing at a rate of 20%+ per year….their potential is incredible. Give them the resources of a giant like Unilever, and the sky’s the limit. Today’s numbers are important sure (in that the proof of concept has been more than proven), but the future potential is what they’re purchasing. No one buys a company at 1X net profit.

      • John Smith

        This is the EXACT mentality that caused the DOT-COM bubble… “huge potential” being the key words. It’s great the Founders and employees were able to get a big payday, but the valuation is ridiculous. I currently own 14 companies, with a combined $20 million in annual revenues, so I do have some experience in the business world. I have also sold a company for 12X EBIDTA a few years ago. It’s these type of deals that warp people’s reality and make them think their great idea is worth a million dollars.
        I hope it works out for Unilever, but my guess is competition is coming from the big boys, and this will end up being a bad deal for them.

        • The Stock Ninja

          With respect, I think you’re looking at it from far too simple a simple point of view. Aside from my personal opinions, which I’ll share in a minute, it’s important to understand that Unilever is a highly conservative company (it isn’t Dropbox acquiring Mailbox for $100M basically as soon as it’s released…which was a horrible choice). Therefore, there’s a strategy here. You and I know half the story, but it’s important not to discount the validity of the acquisition especially when you consider the acquirer.

          While we’ll never know for sure, it’s safe to assume their thought process when similarly to this:

          1. We (Unilever) sell a massive range of consumer staples that everyone needs. We know you’ll purchase these products at certain intervals (when they run out), and we’d really like it to be from our brand when you repurchase.

          2. You (the customer) have to go to a store to buy these products. That means you’ll see our competitor. We don’t like this, because brand loyalty isn’t a guarantee.

          3. It would be awesome if we could make your life easier while guaranteeing you stay loyal to us. But how…?

          Enter DSC…a company that went from nothing to disrupting one of the most competitive consumer spaces in the world, and did it in 5 years. They did it through understanding the market, agility, and marketing. But most of all, they created brand loyalty in a way that Unilever basically can’t by selling their products in a store. After all, if you’ve pre-paid for something and it arrives the same time every month…you’ve pledged your loyalty.

          Not only did DSC succeed when 98% of startups fail….they succeeded in one of the most cut throat industries where the ‘giants’ step on new players like they’re ants.

          4. Even though it might take 10 years to get our money back on this immediate product (and by the way, it’ll take a lot less time with our marketing dollars and resources behind them)…..we can make it back in 2 years if we can replicate this concept for just ONE or TWO of our products. We’re known to the market, we have some loyalty, and we have the resources to deliver these products to our customers, but we need a team that has proven themselves, and from there, we create a subscription model for anything we want.

          DSC knows damn well that Unilever wants to cash in on their expertise in the subscription business, and I guarantee you a discussion of how the team will spend their time on new product initiatives was a part of the acquisition discussion. So yes, immediately a 10X multiple is high, but the acquirer now has everything it needs to turn the DSC concept into a profitable subscription model for their own products. Lastly, don’t forget DSC added new products lines outside of razors to their company and were successful at selling them. Razors were not a one hit wonder idea…..this team can up-sell successfully. The sky is truly the limit.

          I agree, it could crash and burn, and DSC and their line of products could be a one hit wonder after they try and replicate it….or, DSC’s team and Unilever’s resources could build subscription models for 10-15+ products that are already profitable, and secure loyalty that pays for the acquisition 10X over.

          • crowdfundinsider

            I am going to agree with Stock Ninja on this one. Although I do believe some other early stage company valuations have gotten out of hand – not necessarily with DSC. This is a strategic acquisition not a financial acquisition so I think that looking at just the accounting metrics misses the point. Unilever is acquiring an established channel they do not currently have where they can sell their own products. Also we have no insight into what other people were willing to pay… there could have been other interested parties. People are always willing to pay up for growth.
            “They” squawked when Google paid $1 billion for YouTube. How did that work out for them? Instagram … the jury is still out…
            JD