Hindustan Unilever Limited (HUL) is reportedly set to acquire Jaipur-based skincare startup Minimalist. The deal amount could be Rs 3,000 crore ($350 million) and said to be more than just another corporate acquisition.
The D2C (direct-to-consumer) has achieved a valuation of Rs 3,000 crore from Rs 630 crore in just three years and it is clear that it has struck the right balance between innovation, financial discipline and customer loyalty. It reported a revenue of Rs 350 crore or a jump of 89% from the previous year In FY24. Its profit doubled to Rs 11 crore. It has been profitable for four years that is rare in the D2C space.
The interest of HUL in Minimalist is not surprising as major FMCG players like Marico, ITC and Dabur have been snapping up new-age brands to appeal to younger audiences in recent years. However, Minimalist is apart for its ability to scale while maintaining profitability.
The acquisition is not just about HUL gaining a trendy skincare brand, but it is simultaneously also about strategic move. The strong financial health and unique market position of Minimalist make it a valuable addition to the portfolio of HUL. Minimalist stands to benefit from the massive distribution network and resources of HUL.
Many D2C startups have struggled to scale and ended up being sold at discounted valuations. Minimalist is breaking that mold and its Rs 3,000 crore valuation reflects its disciplined approach to business.
The potential acquisition also highlights a shift in the way startups and conglomerates view each other. Startups see the deals as opportunities to scale and FMCG giants see them as a way to stay relevant. The journey of Minimalist from a small skincare brand to a Rs 3,000 crore powerhouse is a evidence that right strategy can achieve incredible success.
