FMCG giant Hindustan Unilever (HUL) is reportedly in talks to acquire direct-to-consumer (D2C) beauty brand Minimalist for around Rs 3,000 crore (around $350 million). This move is a part of HUL’s strategy to diversify its business towards high-margin segments, especially in the digital space.
Minimalist, known for its skin, body and hair care products, has recently seen significant growth in revenue and profitability.
HUL is considering acquiring a majority stake, but this might potentially lead to a 100% stake. Minimalist has raised funding from institutional investors including Peak XV Partners, Unilever Ventures and Twenty Nine Capital Partners. The brand’s largest investor is Peak XV Partners.
Founders Rahul Yadav and Mohit Yadav collectively hold almost 84% of the corporate, while Peak XV Partners holds 6% of the shares.
HUL has previously invested in other digital-first brands corresponding to Oziva and Wellbeing Nutrition.
Minimalist has seen impressive growth, with its revenue increasing 86% to Rs 350 crore in FY24 and profit doubling to Rs 10.8 crore. In FY22, the corporate posted a profit of Rs 16 crore on revenue of Rs 112 crore.
This development reflects the continued consolidation trend in the patron goods industry.
This acquisition could mark one other instance of a fast-growing online D2C brand being acquired by a big enterprise, reflecting the continued consolidation trend in the patron goods industry.
Recently, few D2C brands have been acquired by FMCG giants. Marico is pursuing its D2C acquisition strategy quite aggressively. The company acquired a men’s care start-up Beardhealth food company Real elementscosmetics brand Just Herbs and plant-based products brand Plix. These acquisitions helped Marico diversify its portfolio and enter the growing D2C market.
Emami also entered the D2C segment through the acquisition of The Man Company and bought a 19% stake in D2C nutrition company TruNative F&B Pvt Ltd. These acquisitions are a part of Emami’s strategy to compete with emerging D2C brands and expand its presence in the non-public care market.
