Unilever Buys Dollar Shave Club For $1 Billion

Unilver announced on Tuesday evening that it is getting into the razor business, by agreeing to acquire Dollar Shave Club. No financial terms were disclosed, but a source close to the deal tells Fortune that Unilver is paying $1 billion in cash for the Santa Monica-based business.

Dollar Shave Club is a Venice, California-based company that delivers razors and other personal grooming products straight to consumers by mail. The company positions itself as a cost-effective and convenient alternative to retail chains. It delivers razor blades on a monthly basis and offers additional grooming products for home delivery.

Dollar Shave Club was founded by Mark Levine and Michael Dubin. The pair met at a party and spoke of their frustrations with the cost of razor blades. With their own money and investments from start-up incubator Science Inc., they began operations in July 2011.

Dollar Shave Club is backed by a variety of venture capitalists. In March 2012, seed investors provided $1 million in funding from groups that included Felicis Ventures, Kleiner Perkins Caufield & Byers, Andreessen Horowitz, Shasta Ventures, and Forerunner Ventures. The same group, joined by Venrock, provided $9.8 million in series A funding in October 2012.[8] A year later, a $12 million series B round was raised led by Venrock, Comcast Ventures, New World Investors and Battery Ventures. Amidst the fundraising announcement, Dollar Shave Club announced it would be expanding its product line to include a dozen other men's products in 2014.[9] In June 2015, the company secured $75 million in series D funding.

Dollar Shave Club offers three membership plans, which can be upgraded or downgraded at any time. The membership service first launched March 6, 2012, via a YouTube video that went viral.[13] The YouTube video attracted an unanticipated amount of traffic, that crashed the company's server in the first hour. Once Dubin got the server working, he enlisted a team of friends and contractors to help fulfill the 12,000 orders that arrived in the first 48 hours of launching the video. The orders were initially packed by hand in a warehouse in Gardena, California, before the company moved their warehouse and fulfillment to a third-party logistics center in Kentucky.

Since the membership launch, the company has acquired 2 million subscribers. Although the company primarily markets its products to men, approximately 20 percent of its customers are women.

On July 19, 2016, Dollar Shave Club was acquired by Unilever for a reported $1 billion in cash. Unilever is a multi-national which owns 400 brands.

Unilever is an Anglo-Dutch multinational consumer goods company co-headquartered in Rotterdam, Netherlands, and London, United Kingdom. Its products include food, beverages, cleaning agents and personal care products. It is the world's third-largest consumer goods company measured by 2012 revenue, after Procter & Gamble and Nestlé. Unilever is the world's largest producer of food spreads, such as margarine. One of the oldest multinational companies, its products are available in around 190 countries.