After nine rounds of funding, Harry’s – the NYC-based mail-order shaving startup – has raised over $475 million. Now, fresh off the heels of a recently closed $112 million round of funding, the startup seems well-positioned to expand even further.
The Warby Parker of Shaving
In 2013, frustrated by having to choose between expensive razors that worked well, and low-cost razors that didn’t, entrepreneurs Jeff Raider and Andy Katz-Mayfield decided to found, Harry’s. The concept was simple: provide customers a high-quality razor for a fraction of the cost of leading brands. This model was very similar to the approach taken by eyeglass company Warby Parker in filling the gap between the large-scale manufacturers and inexpensive alternatives.
In order to realize their vision, the company would need to cut certain expenses. The first expense to go was the high cost of marketing and retail selling. By adopting a direct-mail model, the company greatly reduced these expenses. Aside from marketing, the next largest cost to reduce was manufacturing. To address this issue, the team opted for a larger-scale solution. In early 2014, after four successful rounds of funding, the team was able to convince investors that the best course of action to remain viable was to manufacture their own blades. So, in January of 2014, the team raised an additional $122 million venture round of funding and purchased the German blade manufacturing company Feintechnik, for $100 million.
Harry’s Plan in Action
Now that they owned both the means of production and controlled their marketing expense, the team was finally able to provide its customers with high-quality blades without passing along any unnecessary expense. The result was a mail-order plan starting at just $3 per month. Customers were sold. By 2016, the company had amassed a reported 2 million customers, and earned a $750 million valuation.
Looking to the Future
Since 2016, the company’s position has only grown stronger. In February of 2018, in a round of funding led by Alliance Consumer Growth, Harry’s closed another $112 million round of Series-D funding. According to co-founder Jeff Raider, the plan for the large round of funding is to leverage the infrastructure they’ve built to expand the company beyond shaving products. It is speculated this means the company has its sights set on competing further with Gillette’s parent company, Proctor & Gamble. Currently, Harry’s stands as the lone independent able to compete with P&G in the shaving space after Harry’s direct mail-order competitor – Dollar Shave Club – was acquired by Unilever for $1 billion.
Whether or not Harry’s will successfully take on the $57 billion Proctor & Gamble with regard to their new products remains to be seen, but with over $475 million raised in funding so far, investors seem to think they have a chance.