In a world with many “paper” unicorns but few actual unicorn exits, Unilever’s acquisition of Dollar Shave Club for $1b of cash is a huge win for venture investors.
In just five years, DSC captured 15% of the men’s razor cartridge market and achieved one of the largest private e-commerce exits in recent years. So who were the biggest winners and how do venture investors think about returns?
Dollar Shave Club raised $163.5m in total venture funding, most recently last November at a $539m valuation. According to PitchBook, seed-round participants garnered the greatest returns, earning an eye-popping 49.7x multiple on invested capital (MOIC). In other words, a $250k seed check would have returned $12.4m. As an entrepreneur it is important to remember that early stage investors are aiming for these outsized returns with each check that they write.
Later stage investors (Series C through D), including Technology Crossover and Comcast Ventures, invested with greater visibility into Dollar Shave Club’s business and proven market traction. Still, Series D investors returned a 1.6x MOIC, and a 100% annualized return in just 8 months!
Overall, this was a remarkable outcome for both the company and its venture investors.
Dollar Shave Club to continue trajectory under new parent – A pioneer in online D2C subscription businesses, DSC expects to generate approximately $200m in revenue in 2016. CEO Michael Dubin plans to stay on