Merchant Innovation

Dollar Shave Club Glides To $615 Million Valuation

In the three short years since launching via viral videos and word of mouth, Dollar Shave Club has garnered a valuation of more than $600 million, The Wall Street Journal reported Monday (June 22).

That heady sum comes after the mail-order company closed $75 million in funding in an investment round led by Technology Crossover Ventures, WSJ said, citing “people familiar” with the funding activity, and noting the news of the latest round coming from Re/code. The total raised to date via equity financing comes to $149 million, alongside an as yet untapped credit line of $60 million.

The triple-bladed valuation is tied to strong revenue growth, as Dollar Shave Club came in with $65 million in sales last year and could be closing in on more than $140 million in 2015, according to CEO Michael Dubin.

“We have 2 million members that get a shipment every month or every other month,” Dubin told WSJ. “Men’s grooming is exploding, and we think we have a role to play.”

But profits remain elusive with the shift from the Internet to TV ads — a recent move — dampening margins. The cash burn remains a significant one, with the company spending in the “low single digit millions” of dollars each month, according to an unnamed person quoted by WSJ and familiar with the operational spend. Customers who sign on with the service spend about $7 per month on a recurring basis through subscriptions. Both metrics elicited no comment from Dubin, and the company has been notably branching out into adjacent categories, including shave cream and hair products.

In addition to facing grooming stalwarts like Gillette, Dollar Shave Club goes neck and neck with other smaller players such as Harry’s, which WSJ noted has raised $212 million and also bought its own factory in Germany upon deciding to make its own razors.

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