Thematic driver behind Dollar Shave Club acquisition — not the one you would think #DollarShaveClub, $UL
5x revenue buyout? Is this the Internet Bubble again?
In this case, Unilever’s $1 billion (yes, that’s billion with a “B”!) buyout of the Dollar Shave Club has less to do with its e-commerce chops than what it was able to accomplish with its content — develop a loyal following of men purchasing what basically falls under the Health & Beauty sector.
At the end of the day, it has been Dollar Shave Club’s content creation that has attracted millions of views of its edgy advertisements, and in turn subscribers to its monthly razor blade shipping service. So while many would think we would categorize this story under our Fountain of Youth investing thematic, where we are filing it is under Content is King. Yes, in today’s over-stimulating, multi-platform media world, the businesses that are succeeding are those that are focused on creating quality content, and letting the end user access it when and where they want. That same principle is applying more and more to consumer brands and their products.
Unilever paid about five times the revenue that Dollar Shave Club is expected to bring in this year. Much of that premium stems from the value Unilever placed on the razor seller’s brand and customer-relationship skills, he says. E-commerce startups without such a strong brand should expect buyout offers closer to one to two times their annual revenue, he says.
Source: Why Unilever Really Bought Dollar Shave Club – Bloomberg
