FMCG giant Hindustan Unilever Limited (HUL) is reportedly in advanced talks to acquire Jaipur-based skincare startup Minimalist for a staggering Rs 3,000 crore ($350 million). The deal, if finalized, would mark one of the most significant acquisitions in the direct-to-consumer (D2C) skincare space in recent years, reflecting the growing appetite of legacy players for new-age, digitally-native brands.
Minimalist: From Humble Beginnings to a Rs 3,000 Crore Powerhouse
Founded just a few years ago, Minimalist has experienced an explosive rise in valuation, surging from Rs 630 crore ($75 million) to Rs 3,000 crore in under three years. This growth is underpinned by a sharp increase in revenues and consistent profitability, distinguishing the startup in a crowded D2C market.
- Revenue Growth: In FY24, Minimalist recorded Rs 350 crore in revenue, an 89% jump from Rs 184 crore in FY23.
- Profitability: During the same period, profits more than doubled, rising from Rs 5 crore to Rs 11 crore.
- Valuation Multiples: Minimalist is commanding a revenue multiple of nearly 10X, far exceeding the 4-6X industry average for similar startups. This premium valuation reflects the brand’s disciplined financial management and robust growth trajectory.
Strategic Importance for HUL
The acquisition aligns with HUL’s broader strategy of tapping into the burgeoning D2C market and catering to younger, digitally-savvy consumers. This isn’t HUL’s first encounter with Minimalist—the company had previously invested Rs 110 crore ($15 million) through its venture capital arm, Unilever Ventures, to help scale the startup.
By bringing Minimalist under its umbrella, HUL stands to gain:
- Access to New Markets: The move will allow HUL to diversify its portfolio and penetrate the premium skincare segment.
- Leverage Digital Reach: Minimalist’s strong online presence and direct engagement with customers can bolster HUL’s digital transformation efforts.
- Tech and Data Synergies: Minimalist’s customer database and tech-driven operations offer strategic advantages to HUL in refining its product offerings and marketing strategies.
A Trend Among FMCG Majors
The Minimalist-HUL deal isn’t an isolated phenomenon. FMCG players like Marico, Dabur, and ITC have been actively acquiring new-age brands like Beardo, Plix, and Yogabar to strengthen their digital footprints. These acquisitions help conglomerates access tech capabilities and younger audiences while offering startups a chance to scale faster.
However, many such deals have often resulted in “slump sales,” where startups struggled to scale and were acquired at steep discounts. Minimalist stands out as a rare exception, demonstrating robust financial discipline and growth potential that justify its premium valuation.
What’s Next?
While neither HUL nor Minimalist’s founders, Mohit Yadav and Rahul Yadav, have confirmed the deal, industry experts see this as a win-win situation. Minimalist could leverage HUL’s extensive distribution network and marketing expertise, while HUL gains a foothold in a rapidly growing segment.
As the D2C ecosystem matures, such strategic partnerships are expected to shape the future of FMCG, blending the agility of startups with the scale of industry giants.
