HUL In Talks to Acquire Jaipur-based Skincare Startup Minimalist for ₹3,000 Crore

FMCG major Hindustan Unilever Limited (HUL) is in advanced discussions to acquire Minimalist, a Jaipur-based skincare startup, for a whopping Rs 3,000 crore ($350 million). If finalized, this would mark a significant milestone for both companies as it will be one of the largest deals in the direct-to-consumer (D2C) space in the skincare industry.

The Growth Trajectory of Minimalist

Minimalist, backed by Peak XV Partners, has witnessed a remarkable growth trajectory over the past few years. From an initial valuation of around Rs 630 crore (approx. $75 million), the company has managed to grow its worth to a staggering Rs 3,000 crore ($350 million) within a relatively short span. This remarkable achievement can be attributed to the consistent increase in revenues and a solid profit profile that Minimalist has maintained.

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In FY24, Minimalist recorded a substantial revenue of Rs 350 crore, marking an impressive 89 percent growth from the previous fiscal year. Simultaneously, the company's profits more than doubled from Rs 5 crore to Rs 11 crore during the same period. What sets Minimalist apart is its sustained profitability over the past four years, demonstrating its financial stability and robust business model.

Strategic Move by HUL

HUL's interest in acquiring Minimalist underscores its strategic intent to expand its presence in the burgeoning skincare segment. By bringing a dynamic and innovative brand like Minimalist under its umbrella, HUL aims to tap into the rapidly growing D2C market and cater to the evolving preferences of today's consumers. This move aligns with the trend of FMCG giants embracing new-age companies to drive growth and innovation in their portfolios.

The ongoing discussions between HUL and Minimalist come on the heels of the latter's successful funding round of Rs 110 crore ($15 million) from Unilever Ventures and other investors to fuel its expansion efforts. With Unilever Ventures already backing Minimalist, a potential acquisition by HUL would further strengthen the collaboration between the two entities and create synergies that benefit both brands.

Changing Landscape of FMCG Industry

The trend of FMCG behemoths acquiring innovative startups is not unique to HUL, as other industry players like Marico, ITC, and Dabur have also been actively engaging with new-age brands to strengthen their digital footprint. By assimilating these disruptive players into their ecosystem, FMCG companies gain access to cutting-edge technologies, customer insights, and fresh perspectives that drive competitiveness and growth in the market.

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