FMCG giant Hindustan Unilever (HUL) is reportedly in talks to acquire the direct-to-consumer (D2C) beauty brand Minimalist for around Rs 3,000 crore (approximately $350 million). This move is part of HUL's strategy to diversify into high-margin segments, especially in the digital space.
Minimalist, known for its skincare, body care, and hair care products, has seen significant revenue growth and profitability recently.
HUL is considering acquiring a majority stake, but it could potentially lead to a 100% acquisition. Minimalist has raised funding from institutional investors such as Peak XV Partners, Unilever Ventures, and Twenty Nine Capital Partners. Peak XV Partners is the brand's largest investor.
The founders, Rahul Yadav and Mohit Yadav, collectively own nearly 84% of the company, while Peak XV Partners holds a 6% stake.
HUL has previously invested in other digital-first brands like Oziva and Wellbeing Nutrition.
Minimalist has seen impressive growth, with its revenue jumping 86% to Rs 350 crore in FY24, and its profit doubling to Rs 10.8 crore. In FY22, it reported a profit of Rs 16 crore on a revenue of Rs 112 crore.
This development reflects the ongoing consolidation trend in the consumer goods industry.
This acquisition could mark another instance of a fast-growing online D2C brand being acquired by a large enterprise, reflecting the ongoing consolidation trend in the consumer goods industry.
Of late, there were few D2C brands that have been acquired by FMCG giants. Marico has been quite aggressive in its D2C acquisition strategy. The company acquired men's grooming startup Beardo, health foods company True Elements, beauty brand Just Herbs, and plant-based products brand Plix. These acquisitions have helped Marico diversify its portfolio and tap into the growing D2C market.
Emami has also entered the D2C segment by acquiring The Man Company and acquired 19% equity stake in D2C nutrition firm TruNative F&B Pvt Ltd. These acquisitions are part of Emami's strategy to compete with emerging D2C brands and expand its presence in the personal care market.
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