The company started with a simple premise — there’s no reason razor blades should cost so much — and managed to create a viral marketing video that catapulted their company into relative mainstream fame (or at least among people familiar with YouTube). But what started with a viral video is now becoming big time business, as the Dollar Shave Club plans to announce Thursday that they’ve raised $9.8 million in a Series A funding, with plans to expand to Canada and possibly to other men’s product verticals.
What those new verticals are, the company would not say, just that they’re going to find “other ways to make guys lives easier,” CEO Michael Dubin said. But they’ve gained attention from some of Silicon Valley’s most prominent investors: The round was led by Venrock (David Pakman will join Dollar Shave’s board), and the company raised an earlier seed round co-led by Kleiner Perkins and Forerunner Ventures, as well as Andreessen Horowitz, Shasta Ventures and Felicis Ventures.
The company, which launched this spring, provides its subscribers with razors every month, starting at $1 plus shipping, and giving customers the option of scaling up their subscription to higher price points. Dubin said they were inspired to start the company because they didn’t want women to have all the fun in e-commerce.
“Guys don’t have much,” he said. “Girls get to have all the fun.”
Dubin said the company really got big after they released their video this spring, which now has more than seven million views on YouTube.
“We certainly saw an enormous amount of traction after the video. It actually crashed our site for a few hours,” Dubin said. “Sales were thousands of percent higher before they launched the video.”
Dubin said they had trouble keeping up with distribution and requests after they saw the dramatic increase, but that they moved their distribution center out of Southern California and things got better.
“Obviously everyone has scaling pains and we were no exception,” he said, noting that they’ve resolved those issues now. Dubin said the money would be used primarily for hiring, and the company is expanding to Canada on Thursday, where the cheapest option subscription option will be $3.50 per month, including shipping.
Here’s the video that sent Dollar Shave Club toward success:
Correction: This story has been updated to reflect that Dollar Shave Club’s CEO is named Michael Dubin, not Mark Levine.