Dollar shave Club, subscription razor deliveries has secured $75 million in Series D funding round and has now valued to be $615 million.
Los Angeles-based startup that was born out of a holiday party conversation in 2010 deals with men’s grooming products and works to get hold of the market share from razor powerhouse, Gillette. The company became known for its affordable blades, which costs somewhere around three to nice dollars a month for a pack of four. CEO of the startup Michael Dubin created a simple and funny viral video to boost the launch of razors for $1/month which attracted 19 million views.
The company recently grew into products beyond razor that includes hair gel, shaving balm and peppermint-scented butt wipes called ‘One Wipe Charlies’ for which it released another viral video. Despite of its many products, razors remain the best-selling products of the company. With the fresh funds raised the company is planning to hire new employees and widen its product range in the market. It is also planning to give more focus to its existing non-razor products and improve its sales.
The new funding round comes less than a year after a $50 million Series C, and brings total fundraising to $148 million. Participants of this round includes prevailing investors like Venrock, TCV and Forerunner Ventures. Dragoneer Investment Group also took part as a new investor. The company generated $19 million in revenue in 2013, $64 million in 2014 and is intending to hit at least $140 million this year, said Dubin.
The subscription razor sector has been hot recently with the introduction of Gillette Shave Club by Gillette to win back its lost customer. Another subscription service Harry’s for razors, has raised around $200 million in the past one and half-year alone. One of the biggest hurdles faced by Dollar Shave Club is moving out beyond a core audience of Internet-savvy millenials and selling to a larger marketplace, where Gillette has brand recognition that is much spread worldwide.
The startup has more than two million subscribers, who gets razor blade shipments every month or every other month. However, like many other high-growth tech startups, the company is not profitable yet. It has been converting its viral videos into expensive TV spots and reports suggests the startup is pouring millions of dollars into it every month. Dublin said, “Today, you have seen a lot of creative communication from us around the core business. It is fair to expect more around our larger grooming principal over the next 12 months,” regarding the new fund-raising.