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Friday, Mar 31, 2023

Dollar Shave Club Raises More Millions; Eyeing IPO?

Dollar Shave Club of Santa Monica has raised an additional $15.7 million in a financing round and may be looking for more.

The financing came from an insider and was on top of the $75 million Series D round the company raised in June, said a source with knowledge of the funding. Dollar Shave Club is aiming to raise $9.4 million more as part of the round, which would bring the company’s round to slightly more than $100 million, according to a filing with the Securities and Exchange Commission. That would make it one of the biggest of the year in Silicon Beach.

Dollar Shave Club’s online razor subscription service delivers a razor and several blade cartridges each month to customers. The company claimed in June to have more than 2 million subscribers and said it accounted for about 7 percent of all razor sales in the United States.

This latest financing was brokered by J.P. Morgan Securities. One person close to the company said the financing is possibly a precursor to Dollar Shave Club making an initial public offering of its stock or a merger.

“They’re not filing for an IPO this year, but there’s a lot of M&A interest and there is a lot of IPO interest,” the source said.

A Dollar Shave Club representative declined comment.

The $15.7 million round was initiated by an insider who was especially enthusiastic about Dollar Shave Club’s prospects, said the source, who added the company is on track to post its largest fourth-quarter revenue ever.

Founded in 2012, Dollar Shave Club has grown rapidly. It reported revenue of $64 million last year, up from $19 million the year earlier, and previously estimated its sales would be $140 million this year.

Yet, despite its rapid growth and a bankroll of $164 million in venture capital, Dollar Shave Club is facing down several cash-flush copycat rivals, including heavily financed razor subscription startup Harry’s of New York, which has raised $287 million, and Procter & Gamble’s razor brand Gillette, which recently launched its own razor subscription service called “Gillette Shave Club.”

An IPO would give Dollar Shave Club more cash to stave off rivals. The company could also become an acquisition target for an incumbent razor retailer, such as Procter & Gamble.

Dollar Shave Club’s $90.7 million Series D round is one of the larger tech company financings this year. Other large rounds this year include mobile gaming company SGN’s $130 million round in July, Snapchat’s reported $338 million Series E in July and e-retailer Honest Co.’s $100 million Series D round in August.

Dollar Shave Club’s June $75 million Series D round was led by Technology Crossover Ventures, with participation from Dragoneer, Comcast Ventures and Forerunner Ventures. Then, the company was reportedly valued at $615 million.

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