Largest deals in India’s direct-to-consumer space: Hindustan Unilever Limited set to buy Jaipur-based skincare startup Minimalist for Rs 3,000 crore

In a first, Hindustan Unilever Limited (HUL) is set to buy Jaipur-based skincare startup Minimalist for Rs 3,000 crore ($350 million). This will be one of the largest deals in India’s direct-to-consumer (D2C) space, especially in the skincare segment. According to people aware of the deal, this acquisition is testimony to Minimalist’s excellent growth story and healthy financials.

Minimalist valuation rises just in 3 years: Hindustan Unilever offer makes it one of the largest deals in India’s direct-to-consumer space

Founded by Mohit Yadav and Rahul Yadav, Minimalist has seen its valuation soar from Rs 630 crore ($75 million) just three years ago. This remarkable rise is attributed to a sharp revenue increase and sustained profitability. In FY24, the startup achieved revenues of Rs 350 crore, an 89% jump from Rs 184 crore in FY23. Its profits doubled more than, increasing from Rs 5 crore to Rs 11 crore during the period. Minimalist’s consistent four-year profitability has earned it stature in a marketplace where steep loss is the way of life for most.

At 10 times revenue, it commands a pretty premium valuation with industry standards lying in the brackets of 4-6X for similar deals. This certainly is reflective of the brand being well placed by its financial disciplines and market standings.

In response to queries, HUL said that it continually analyzes strategic growth opportunities and refused to confirm the deal. The acquisition would add Minimalist to a growing list of digital-first brands that major FMCG players are inducting into their respective portfolios.

What the deal means for HUL?

The deal is more than just an expansion for HUL. It well captures how large conglomerates are using new-age brands to tap into younger, digitally savvy consumers. In turn, startups get access to extensive distribution networks and resources to scale.

Unlike several D2C startups that were acquired at discounted valuations due to scalability issues, Minimalist seems to be an exception. The brand’s steady growth and robust fundamentals have made it a lucrative proposition for HUL.

If this acquisition is finalized, it will reshape the D2C and skincare landscapes of India and set a precedent for value creation in the FMCG sector.

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