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Monthly razor subscription service Dollar Shave Club has raised a $50 million round of capital led by Technology Crossover Ventures. The round, which was raised in July, but not disclosed until today, brings the company’s total funding to $73 million. Dollar Shave Club delivers razors to its members monthly for between $1 and $9 per month.
Ever since it’s promotional videos on YouTube went viral, Dollar Shave Club has been growing exponentially. The original YouTube video, which featured a humorous monologue by CEO Michael Dubin, now has over 16 million views. Dollar Shave Club now sells 8.8 percent of the razor cartridges in the United States, has over one million members, and is on track to exceed $60 million in sales this year.
Beyond a keen sense of viral marketing, Dollar Shave Club has benefited from a savvy understanding of margins in the razor business. The New York Times pointed out that incumbent competitor Gillette reported a 60 percent gross margin in 2004. Dollar Shave Clubs’ inexpensive razors undercut those large margins signifigantly.
Additionally, Dollar Shave Club’s subscription model is a good fit for the razor business.
“A few years ago there was a monthly shipment, monthly revenue addiction. You could get anything delivered to you in a box on a monthly basis. Some of these businesses are thriving while others have had to change their business model. Subscription is right for some businesses, but not others,” said Dubin to Built in LA in a previous interview. “You have to ask yourself, ‘Is it a must-have or a nice-to-have?’ Men run out of razors frequently and hate schlepping to the store, so it works for our business. But it doesn’t work for every business.”
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Recently Dollar Shave Club has expanded beyond razors. In late 2013, the company started offering other grooming items, including shaving cream and butt wipes. With male grooming accessories becoming more socially acceptable, Dubin has said the company’s goal is to “own” the bathroom.
“Gone is this stigma of being a metrosexual, sharing your grooming tips with one another,” Dubin said to the New York Times. “Am I buying motor oil, or am I buying something to put on my face to look and smell good?”
Now with $50 million in new funding, look to see Dollar Shave Club filling up the bathroom soon.
