Let’s start with a confession: Harry’s, not long past its first birthday, is more than an ecommerce razor vendor. It doesn’t take a veteran ecommerce analyst to figure out that if a fledgling firm is in a position to make a $100 million acquisition before its first birthday, it’s got a bold and convincing vision of its future.
Big spend, big plans
Co-founded by Andy Matz-Mayfield and Jeff Raider, the company raised $122.5 million last year from Thrive Capital, Tiger Global, SV Angel and Highland Capital (plus a few others). Then it spent $100 million of it on acquiring the 93-year-old razor manufacturer Feintechnik. Brave? Most ecommerce managers and analysts would certainly think so. But there’s a serious plan behind the move.
This is a David getting ready to take on Goliaths like Gillette and Schick, who between them control a thundering 85 percent of the shaving market. And it’s doing so by taking charge of the manufacture of the products it wants to sell online. That means it controls making the very products it designs, distributes and sells directly to customers – in other words, it’s a fully vertically integrated company, one amongst a very small and exclusive group in the shaving industry, like Schick and Gillette.
Raider isn’t new to the business of selling high-quality, beautifully-designed products direct to consumers at affordable prices, having also been a co-founder of Warby Parker. But while Warby Parker and other New York startups like Bonobos have done a great job in giving a new twist to everyday products (eyewear and men’s clothing respectively), both depend on third-party manufacturers.
From “e” to “v”
With Feintechnik in the fold, Harry’s has a particularly flexible manufacturing plant at its disposal: the company has extensive experience in been making not just simple, budget single blade razors but extends right up to high-end five-blade razors, which have become Harry’s staple.
No experienced ecommerce analyst will be surprised to find that, with these three core capacities under its hat (control of manufacturing, control of design, control of the sales funnel), the startup attracted investment from Raider’s Warby Parker co-founder colleagues.
With the remaining $22.5 million, Harry’s plans to expand its high-quality, reasonably priced portfolio of products. And with its vertically integrated capabilities, it’s calling itself a “vcommerce” company.