Hindustan Unilever Ltd Acquires Majority Stake in Minimalist: A Landmark Move in the D2C Skincare Space

In a move that has sent ripples across the consumer goods and skincare industries, Hindustan Unilever Ltd (HUL) recently announced its acquisition of a 90.5% stake in Minimalist, a fast-growing premium beauty brand, for a staggering Rs 2,715 crore. The strategic acquisition marks a significant step in HUL's journey towards strengthening its presence in high-demand sectors, particularly within the Beauty & Wellbeing portfolio.

Let’s delve into the details and understand why this deal is a game-changer.

Minimalist: A D2C Phenomenon

Founded just five years ago by brothers Rahul Yadav and Mohit Yadav, Minimalist has become a sensation in the direct-to-consumer (D2C) skincare space. Built on a foundation of science, transparency, and product efficacy, the brand caters to the modern, informed consumer who prioritizes active ingredients and minimalistic formulas. With annual sales crossing Rs 500 crore and an impressive profit trajectory, Minimalist has carved a niche for itself in a highly competitive market.

From an initial valuation of Rs 630 crore three years ago to a pre-money enterprise value of Rs 2,955 crore at the time of the deal, Minimalist has grown exponentially. Its disciplined approach to financials, including stable profitability and significant revenue growth, makes it a rare gem among Indian D2C startups.

The Details of the Acquisition

HUL’s acquisition of Minimalist is one of the largest deals in the D2C sector to date. The FMCG giant has signed a share purchase and subscription agreement to acquire 90.5% of the brand’s shareholding. This includes a secondary buyout valued at Rs 2,670 crore and a primary infusion of Rs 45 crore. An additional 9.5% shareholding will be acquired from the founders within two years, completing the transaction as per agreed terms.

HUL’s CEO and Managing Director, Rohit Jawa, emphasized the strategic importance of this acquisition: “We are delighted to welcome Minimalist into the HUL family. This acquisition is another key step to grow our Beauty & Wellbeing portfolio in high-growth premium demand spaces. Mohit, Rahul, and their team have created a great brand built on science, product efficacy, and transparency.”

Why This Deal Matters?

1. Strategic Growth in Premium Beauty: The acquisition solidifies HUL’s commitment to expanding in the high-growth premium beauty sector, a space that has gained immense popularity due to increasing consumer awareness and demand for active ingredient-based skincare.

2. Strengthening D2C Capabilities: Minimalist’s success as a D2C brand provides HUL with a direct entry into the digital-first market, tapping into online commerce and social media-driven consumer behavior.

3. Validation of India’s Startup Ecosystem: With Minimalist achieving significant success in a short span of time, the acquisition underscores the immense potential of Indian startups to scale and attract big-ticket investments.

Financial Highlights

Minimalist reported an 89% year-on-year revenue growth in FY24, reaching Rs 350 crore, up from Rs 184 crore in FY23. Profitability more than doubled, increasing from Rs 5 crore to Rs 11 crore during the same period. This consistent financial discipline has allowed the company to command a premium valuation, with a revenue multiple of 10X—well above the industry average of 4-6X for similar deals.

Notably, investors like Peak XV Partners and Unilever Ventures have reaped significant returns from this deal. Peak XV Partners, which invested Rs 79 crore three years ago, is set to earn Rs 895 crore, achieving a 10X return.

Synergies and Future Prospects

The inclusion of Minimalist in HUL’s Beauty & Wellbeing portfolio is expected to unlock synergies across R&D, distribution, and marketing. Minimalist’s robust online presence, combined with HUL’s extensive offline distribution network, could further accelerate the brand’s growth trajectory.

The timing of this acquisition aligns with HUL’s strategy to diversify and grow its portfolio in high-margin, high-demand categories. Minimalist’s transparency-focused approach resonates with a growing demographic of discerning consumers, providing HUL a unique opportunity to lead the way in transforming India’s skincare market.

Broader Industry Trends

Indian beauty and personal care startups have been flourishing, driven by the rise of e-commerce and the influence of social media. However, scaling and maintaining profitability remain significant challenges. The Minimalist-HUL deal highlights that a strong brand identity, combined with financial discipline and a consumer-centric approach, can make startups highly lucrative for large corporations.

A Strategic Move: Kwality Wall’s Demerger

HUL’s acquisition of Minimalist is more than just a transaction; it’s a testament to the evolving dynamics of the Indian skincare market and the increasing convergence between established conglomerates and nimble startups. Here are some top Minimalist products you can explore and add to your skincare routine: Minimalist Anti-Acne 2% Salicylic Acid Face Serum for All Skin Types

Minimalist Dull Skin, Dark Spots & Uneven Tone Treatment 10% Vitamin C Face Serum

Minimalist Oil Control & Anti-Acne 10% Niacinamide Face Serum with Zinc

Minimalist 10% Vitamin B5 Gel Face Moisturizer For Oily & Acne Prone Skin