Amidst slowing growth, D2C brands and FMCGs turn to each other for answers

Over the past month, a number of reports have surfaced of consolidation and acquisitions in the D2C personal care space. The biggest news surrounded Hindustan Unilever Limited's (HUL) potential acquisition of Peak XV-backed skincare brand Minimalist for about Rs 3,000 crore (~$350 million). This would mark a decent exit for Minimalist’s investors, with the company last valued at roughly $75-80 million when it raised funding over three years ago.

Similarly, The Economic Times has reported that GIC-backed Wow Skin Science is up for sale. The Good Glamm Group, too, is also in the market to sell some of its brands to raise money amid a cash crunch, according to a report by MoneyControl and sources The CapTable spoke with.

Indeed, investors and industry executives The CapTable spoke with concurred that there’s increasing appetite among D2C brands for an acquisition by traditional fast-moving consumer goods (FMCG) companies amid a general slowdown in the personal care space. “There is more noise around acquisition than funding at this point,” said a consultant involved in startup deal-making. The question now is whether this will become the natural route for D2C brands once they hit a certain scale.