Harry’s Raises $112 Million to Move Beyond Shaving

The founders of Harry’s turned their company into a fast-growing competitor to established giants like Gillette in the $2.4 billion shaving industry.

Now they want to take on Gillette’s parent company, Procter & Gamble.

Harry’s plans to announce as soon as this week that it has raised $112 million in a new round of financing, money that its leaders said would help the company develop brands beyond men’s grooming.

“We’ve built a lot of infrastructure at Harry’s that we think we can leverage into new categories,” Jeff Raider, one of Harry’s founders, said in a telephone interview. “It’s something that we’ve been excited about for a long time, and we’re now at a point in our business where we can act on it.”

It is the latest effort by the company’s founders and co-chief executives, Mr. Raider and Andy Katz-Mayfield, to build out their business at a time when younger, internet-savvy consumer companies are taking market share away from incumbents like Procter & Gamble and Unilever.

Frustrated with the costs of traditional disposable razors, Mr. Katz-Mayfield and Mr. Raider, childhood friends who previously worked together at the consulting firm Bain & Company, founded the company nearly five years ago. They modeled Harry’s after Warby Parker, the hip glasses purveyor that Mr. Raider helped found.

Harry’s, as well as Dollar Shave Club, has used a subscription model and savvy marketing to sell directly to younger customers over the internet and gain market share from Gillette and Schick.

Harry’s has used the millions in venture capital funding to buy the German factory that makes its razor blades and expand into other skin care products. The company also started selling its products in Target and other stores. The two founders said Harry’s was on track to become profitable this year.

Now Mr. Raider and Mr. Katz-Mayfield want to apply the lessons they have learned to consumer goods like personal care for men and women, household items and baby products.

Already, Harry’s has taken a minority stake in Hims, a start-up that makes men’s hair-loss products, and it intends to buy majority ownership in other brands.

Aiding them in that quest is the new financing round valuation. The investors included Alliance Consumer Growth and the Singaporean sovereign wealth fund Temasek, as well as existing investors.

One looming question is whether Mr. Raider and Mr. Katz-Mayfield intend to take their company onto the public markets eventually. The pair declined to comment on their plans but said they had plenty of time to decide. Unilever paid $1 billion for Dollar Shave Club two years ago.

“One of the things we’ve always been focused on is being able to control our destiny,” Mr. Raider said. “What’s nice about our investors in particular is that they invest in both private and public markets, and they understand drawbacks and benefits of all these things.”

Content originally published on https://www.nytimes.com/2018/02/15/business/dealbook/harrys-shaving-financing.html by MICHAEL J. de la MERCED