India’s D2C space has seen seen a lot of activity over the last few years, but it now seems to be seeing some major exits as well.
Five-year-old D2C brand Minimalist has been acquired by FMCG giant Hindustan Unilever at a valuation of Rs. 3,200 crore after HUL acquired a 90.5 percent stake in the business for Rs. 2,955 crore. Minimalist founders Mohit Yadav and Rahul Yadav will continue to run Minimalist for the next two years. HUL will acquire the remaining 9.5 percent stake from the founders over this period, and will then have a 100 percent stake in the company.
This is a remarkable story for Minimalist, which was founded just five years ago in 2020. Minimalist was founded by brothers Mohit Yadav and Rahul Yadav in Jaipur. Mohit Yadav had a BCom from Rajasthan University, and had worked with Deloitte, Credit Suisse and CarDekho. Rahul Yadav had a BTech from IIT Roorkee, and had worked with CarDekho.
Minimalist wasn’t their first company — the duo had started an e-commerce store for kids named MangoStreet in 2010, and it had been acquired by HushBabies. In 2018, they had co-founded FreeWill, which created custom hair products for Indian users. But in 2020, they started Minimalist, which sold skincare products.
There was no shortage of D2C skincare brands in India at that time, but Minimalist looked to differentiate itself with its straightforward, no-BS approach — Minimalist’s products had no loud packaging, but simply listed down the ingredients against a white background. The brand focused on transparency, and said that there were lots of unfounded claims going around over “natural” products. Minimalist argued that being “natural” didn’t mean that something was necessarily beneficial, and instead used radical transparency by keeping its ingredients at the front and center of its packaging with a motto of “hide nothing”.
The strategy broke the clutter in the skincare space, and Minimalist grew quickly. It touched a valuation of Rs. 100 crore within 8 months of being founded. Its Series A was led by Peak XV Partners in July 2021. By FY23, Minimalist had a revenue of Rs. 184 crore, which was up 70 percent over the previous year, and a profit of Rs. 5 crore. Minimalist’s profit grew to Rs. 10 crore in FY24. It now has over 650 employees, and is building a second plant in Jaipur.
And Minimalist’s Rs. 3,200 crore acquisition by FMCG giant HUL is one of the biggest exits in India’s D2C space. In the past, there have been some major acquisitions, such as Titan’s acquisition of Caratlane for Rs. Rs. 4,600 crore, Good Glamm’s acquisition of the Mom’s Co, Reliance Retail’s acquisition of Alia Bhatt’s Ed-a-Mama for Rs. 300 crore, and Aditya Birla Retails acquisition of Bewakoof for Rs. 200 crore. Minimalist, however, managed a massive acquisition in five years of being founded, and while being run from a Tier 2 city like Jaipur. India’s D2C space might have plenty of competition, and hundreds of companies might have fallen by the wayside in the last couple of years, but the ones that have made it seem to have made it big.