Harry’s has raised $155 million in a Series E funding round led by Bain Capital and Macquarie Capital, valuing the company at $1.7 billion, according to Forbes. This puts the retailer’s value 25% higher than the price of the blocked $1.37 billion acquisition deal that Edgewell attempted in 2020, with the growth attributed to product diversification during the COVID-19 pandemic.
The pandemic initially hurt sales as fewer people went out, reducing the need to shave. “I remember one of the first Zoom calls — everyone was growing a beard,” said Jeff Raider, Co-CEO of Harry’s in an interview with Forbes. “I was like ‘Oh, gosh, this isn’t gonna be good.’”
However, the brand not only survived but thrived due to its wide range of products, including body washes, shampoos and deodorants. Sales rose 25% in 2020 to $370 million, and Harry’s launched three new brands: Flamingo women’s shave products, Headquarters hair and scalp care and Cat Person high-protein cat food and pet care items. Additionally, the company benefits from people paying more attention to hygiene overall, even if they weren’t dressing up to go out.
“Segments of our business grew that we wouldn’t have otherwise expected and our direct-to-consumer businesses took off in the U.S. and the UK for both Harry’s and Flamingo,” said Raider. “We have a big soap business, and people were now more conscious of hygiene, showering at home more as they traveled less, and demand for those products skyrocketed.”
Harry’s will use the new capital to reinforce its strengths by developing new products and making acquisitions in the direct-to-consumer market. The cash infusion gives the retailer more than $200 million to make deals, and “M&A will be a pretty important part of the strategy,” according to Harry’s Co-CEO Andy Katz-Mayfield.
“Harry’s should be the platform of choice for other founders who are a couple of years behind them in their evolution,” said Jeff Robinson, Managing Director at Bain Capital in an interview with Forbes. “We’re bullish on their ability not just to incubate additional products in-house, but also acquire innovative brands and bring a professionalized distribution and marketing campaign to them.”