Why Unilever Really Bought Dollar Shave Club

Dollar Shave Club hit the jackpot when Unilever agreed to buy the online men's razor merchant for $1 billion. Other e-commerce startups such as Birchbox and Stitch Fix can't necessarily expect their own suitor to sweep in with such sweet deals. That's because the key to Dollar Shave Club's appeal is not so much its online prowess but the fact that it built a powerful brand in four years.

In a blog post after the deal was announced Wednesday, David Pakman, a partner at Venrock and an early investor, said he never saw the shaving upstart as an e-commerce company. The key, he said, is how Dollar Shave Club developed relationships with men, many itching to find an alternative to the high-price blades sold by Gillette and Schick. Sucharita Mulpuru, an analyst at Forrester Research, essentially concurs with Pakman's take. "I don’t think this is a testament on 'e-commerce is back,'" she says. "What Dollar Shave built is really unique, and the list is very short of other companies that have assets that are as attractive as they are."