P&G's First Acquisition of 2020 Is a DTC Shaving Brand for Women

The new year is only nine days old, and P&G has already made a major acquisition. The CPG giant has acquired Billie, a direct-to-consumer women's shaving brand, for an undisclosed amount. Billie launched in November 2017 and had raised $35 million to date, with a Series A round in January 2019 of $25 million led by Goldman Sachs’ Private Capital Investing. P&G’s last acquisition occurred in February 2019 when it bought This Is L, a period startup, with reports putting the value of the deal at $100 million. “We're thrilled by the prospect of joining P&G to bring high-quality products at affordable prices to women around the world,” said Georgina Gooley, co-founder of Billie, in a statement. “Their ability to create global household brands that have stood the test of time is a testament to their brand-building expertise; together, we'll be able to create an even stronger brand for womankind.” Billie’s co-founders, Gooley and Jason Bravman, will stay on and continue to lead the brand. They will report to Gary Coombe, CEO of P&G Global Grooming, who oversees brands such as Gillette, Venus and Joy, a razor that launched in March 2019. “The impact and consumer connection Georgina and Jason have been able to make with Billie in a short period of time has been remarkable,” Coombe said in a statement. “The combination of Billie’s high-quality, naturals-focused razors and body care products, and P&G’s highly skilled and experienced people, resources, technical capabilities and go-to-market expertise will allow us to further reach millennial and Gen Z women through a fresh, bold attitude.” [kickout id="1"] For the past year, Billie has ramped up its marketing efforts in the face of steeper competition from companies and products like Harry’s Flamingo shaving line. (Harry's was acquired last year by Edgewell Personal Care for $1.37 billion.) Gillette Venus also started to compete with DTC brands by announcing Venus Direct, a subscription service, in 2018 as well as working on partnerships with Vera Bradley and Gen Z influencer Remi Cruz to release limited edition shavers. Since June 2018, Billie’s marketing campaigns raised brand awareness—by showing body hair. Lots of body hair. One of the company’s stunts in July 2019, which showed women with pubic hair in bathing suits, was first flagged by Facebook as “adult material,” though it was later allowed to run. Despite the challenges P&G faces from shaving competitors, Sucharita Kodali, an analyst at Forrester, said she isn’t sure what P&G will gain from the acquisition. Unlike Dollar Shave Club, Billie is a relatively unknown brand, Kodali pointed out. If P&G wanted to acquire its customers, she argued, it could’ve done it at a cheaper price point than whatever it bought Billie for. “Five years ago, you could’ve made a case that they were being bought because you didn’t know,” Kodali said. “But I think it’s pretty categorically proven that nobody's business has been transformed by purchasing these DTC brands.” Richie Siegel, founder and lead analyst at retail consultancy firm Loose Threads, added that the timing of the announcement, the lack of acquisition price and no major press makes the deal look like either Billie was looking to sell or was in the process of raising another round and thought this was a better option. "There’s enough to make this an acqu-hire," Siegel said. However, Siegel said if the Billie team ends up leading the shaving division at P&G, similar to how the Harry's and Edgewell deal shook out, it makes sense and gives Billie a "chance to play in a much bigger field." These smaller exits and Walmart's lackluster ecommerce acquisition strategy point to a bigger issue in the industry, according to Siegel. "The underlying problem is you’ve gotta figure out how to hire better people," he said. "I don’t think these brands know what they’re usually buying." It's not all doom and gloom. Sapna Shah, principal at Red Giraffe Advisors, a retail consultancy, said it's a win-win situation for the brands. "P&G gains credibility with younger customers and access to that market," Shah said. "For Billie, customer acquisition only gets more expensive over time, so having access to P&G’s resources could really help to scale the business. "From a DTC investor perspective, it’s encouraging to see another exit in the DTC space; we’ve seen a few in the personal care space like Dollar Shave [Club] and Harry’s, and I expect we’ll continue to see that going forward as the incumbent brands look for access to younger customers—millennials and Gen Z."

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P&G's First Acquisition of 2020 Is a DTC Shaving Brand for Women

Billie's co-founders will stay on to lead the brand

Ann-Marie Alcántara

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Ann-Marie Alcántara