Dollar Shave Club Sells for $1 Billion to Unilever

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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 
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