Weekly Update #158: Dollar Shave Club Sells for $1 Billion to Unilever

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Hello Investors,
E-Commerce Lives On: Dollar Shave Club acquired for $1 Billion
Along with adtech, e-commerce has been one of the hardest hit sectors in Venture Capital. Investments into the sector have dropped precipitously: e-commerce is on pace for its slowest fundraising year since 2012.
However, things may be on the mend: Los-Angeles based Dollar Shave Club was acquired last week for $1 billion by Unilever. The Venrock-backed subscription e-commerce company, known for its witty (and viral) video ads, will deliver a substantial return to its early investors:
The $1 billion price tag corresponds to a ~ $41 share price. Returns for investors should be:
  • Series Seed: 4,869% in 4 years
  • Series A + B: 1,007% in 3 years
  • Series C: 267% in 2 years
  • Series D: 59% in 8 months  

Dollar Shave Club was on track for roughly $200 million in 2016 revenue. The 5x "multiple" paid by Unilever looks high, relative to the valuations commanded by publicly traded e-commerce companies. Take Wayfair, for instance.

Wayfair, a VC-backed company that went public in October 2014, trades at a paltry 1.3x Enterprise Value (source: SEC filings). 

So, should e-commerce companies rejoice? The news is certainly a boost, but competitors will need to have 1) a well-known brand, and 2) revenue growth with a clear path to profitability. Some that come to mind are New-York based companies Warby Parker and Rent the Runway

Phil Haslett | Founder + Head of Investments | EquityZen 
In other news...
“Technology companies are grappling with the toughest IPO market in seven years. Nevertheless, buoyed by the stellar debuts of LINE Corp. in July, Twilio in June and Acacia Communications in May, a fleet of other tech companies are inching closer to a public listing.”
"Only four other e-commerce companies have exited for more since 2009."
"Coupa would be one of the largest software companies looking to float on the U.S. stock market this year, which has seen few IPOs due to market volatility. It would come on the heels of an offering by communications software maker Twilio Inc TWLO.O, which went public last month."

Funding Rounds Since Last Week

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