Why HUL Acquired Minimalist: Strategic Insights

Why HUL Acquired Minimalist

GoCrackIt Originals: Current Business Problem

Case ID: GCICBP| Beauty & Personal Care (BPC) + Marketing + M&A + Finance | 11 | 21st Feb 2025

Cracking changing consumer behaviour code in Beauty & Personal care: Why HUL acquired Minimalist

©2025 This case is written by Alok Shrivastava, Co-Founders, GoCrackIt & Arpit Gupta, GoCrackIt and as the basis for learning, class discussion & education rather than to illustrate either effective or in effective handling of any entity/ management. This case can not be copied and circulated without the explicit permission of GoCrackIt (www.gocrackit.com).

Introduction

In 2015, if you walked into a beauty store, you’d be bombarded with glossy posters of Bollywood celebrities endorsing luxurious creams, promising flawless skin. Fast forward to today, and the landscape has flipped—scroll through Instagram, and you’ll find Gen Z skincare enthusiasts dissecting ingredient lists, questioning formulations, and demanding transparency.

Imagine this: A 24-year-old urban consumer, scrolling through Instagram, stops at a skincare post—not because of a Bollywood celebrity but because of a science-backed explanation of why “Niacinamide 10%” works for acne scars. No flowery marketing. No exaggerated claims. Just results.

Enter Minimalist—a no-nonsense, science-backed skincare brand that disrupted the industry by putting ingredients before branding. No fancy packaging. No exaggerated claims. Just pure, potent formulations that worked.

So why would a legacy giant like Hindustan Unilever, built on mass-market beauty brands, bet nearly INR 3,000 crore on this challenger? Was it a defensive move, a strategic masterstroke, or the future of beauty retail? Let’s unpack the motivations, market dynamics, and the shifting tides of consumer behavior that made this deal inevitable.

The Rise of Minimalist

Founded in 2020 by Mohit Yadav and Rahul Yadav, Minimalist is a rapidly growing Indian skincare brand known for its science-backed formulations, transparency, and ingredient-first approach.

Minimalists identified a niche of affluent, informed millennials and Gen-Zers— “skintellectuals”—by focusing on transparency and science-backed skincare. Instead of relying on generic “chemical-free” claims that most of the Indian brands did, it educated consumers on active ingredients, earning trust from those who prioritise efficacy over hype. The global trend has also seen more support for transparency in skincare ingredients (NielsenIQ 2024)

Minimalist has built a strong portfolio of best-selling skincare products, some of the most popular one includes:

Niacinamide 10% Face Serum : For acne marks, acne prone & oily skin

https://nielseniq.com/global/en/insights/commentary/2024/beauty-2024-mid-year-update/, accessed on 21st Feb 2025

2. All details are from their websites, accessed on 21st Feb 2025

2. Minimalist 2% Salicylic Acid Serum : For oily skin

They also publish consumer study of the use of their products, for example as shown in below:

The other products include Minimalist 10% Vitamin C Serum for brighter skin, Minimalist 2% Hyaluronic Acid Serum for skin hydration and Minimalist SPF 50 Sunscreen.

If you compare the Minimalist product with all competitors, the price variation found to be not much at MRP level (although Minimalist seems to be slightly costlier) as shown in Annexure-1.

Financial Performance Source

Minimalist has demonstrated consistent revenue growth and has turned a profit from the beginning, a rare feat in otherwise burn and grow startups landscape.

3. Minimalist’s FY22 Revenue Surges to Rs 108 Cr, Profit Triples | Startup Story

Item

FY 21

FY 22

FY 23

FY24

Revenue Growth:

INR 22 Crores

INR 108 Crores

4.9x

INR 184 Crores

1.7x

INR 347 Crores

1.9x

Profit Growth:

INR 5* Crores

INR 16 Crores

3.2x

INR 5.2 Crores

-0.3x

INR 10.9 Crores

Please note that the decline in profits in FY23 is attributed to the increase in employee expenses brought on by the significant increase in the number of employees.

However, the company recovered with a more than twofold gain in profits while keeping its targeted expense ratio, especially marketing and cogs.

Description	FY 23 (in INR Crores)	FY 24 (in INR Crores)
Operating Revenue	184	347
Costs of materials consumed	71.2	101.5
Advertisement costs	65.3	117.1
Employee benefit expenses	18.3	28.7
Profit	5.2	10.9

4. Minimalist’s FY22 Revenue Surges to Rs 108 Cr, Profit Triples | Startup Story

5. Minimalist’s FY22 Revenue Surges to Rs 108 Cr, Profit Triples | Startup Story

6 .D2C Brand Minimalist’s FY24 Profit Doubles To INR 10.9 Cr, Revenue Up 1.9X YoY

7. D2C Brand Minimalist’s FY24 Profit Doubles To INR 10.9 Cr, Revenue Up 1.9X YoY

The Acquisition by HUL

Hindustan Unilever Limited (HUL) said it will acquire a 90.5% stake in Minimalist for INR 2,955 crore through secondary buyouts and primary infusion. The remaining 9.5% will be acquired from the founders within 2 years.

The valuation scene in this space as against the said deal is given in Annexure-2.

Please think through the following questions and answer them.

Why do you think Minimalist fared so well?
Why has HUL acquired Minimalist?
Why is the valuation of Minimalist justified?

Once you are done with your own answers, please find here the sample solution to this case.

Annexure-1 Product benchmarking

COMPANIES	PRODUCTS
COMPANIES	SPF 50 Sunscreen *(MRP in INR, 50g/ 50 l)**	After Discount Price, if any (INR)
Minimalist	399	399
Mamaearth	349	297
The Good Glamm Group	360	199
Wow Skin Science	349	349
Plum	359	323
Pilgrim	395	395
Lakme	339	186

*The above prices are MRP taken from their respective websites on 20th feb 2025, 02 PM. Some of these firms have given multiple discounts to make it more lucrative for the customers. For example in Mamaearth the discount given is 15%, The Good Glamm Group has mentioned the discount of ~45%,Plum has mentioned the discount of 10%, Lakme has mentioned 45% discount.

Annexure-2 Valuation Scene in Beauty and Personal Care space

Company	Valuation (in INR CR) (year)	Revenue (year)	Revenue Multiple	Remark
Mamaearth	10500 (2023)	1920 (2024)	5.5x	Their valuation goes through more volatility due to recent financial performance concerns
Good Glamm Group	10,829 (2024)	603 (2023)	~18x	Facing Financial challenges, with plans to raise Rs.200–250 Cr, sources indicate the post-money valuation could plunge to around INR 1000 Cr
Wow Skin Science	2,165 (2025)	233 (2024)	9.29x	Valuation declined from $400 million to $250 million, due to consecutive revenue drops
Plum	2,165 (2022)	250 (2024)	8.66x	rising net losses indicate increased spending, likely on marketing and scaling efforts
Pilgrim	2,165 Cr (2025)	204 Cr(2024)	10.61x	With its $8.93 million Series B round in August 2024 reinforcing investor confidence
Minimalist	2,995 (2025)	347 (2024)	8.6x	Valued as per HUL for acquisition

8.https://honasa.in/cdn/shop/files/Investorpresentation23052024.pdf?v=1731477143

9. https://www.business-standard.com/companies/start-ups/good-glamm-scouts-for-investors-streamlining-ops-amid-financial-crunch-125013101624_1.html, 1 $ = INR 86.63

10. https://inc42.com/buzz/wow-skin-science-seeks-strategic-buyer-at-reduced-valuation-of-250-mn/, 1 $ = INR 86.63

11.https://tracxn.com/d/companies/plum/__DaP2mpMMp9OoJl_forYl79iG3wgUrzFcaBZ9zXrw0FQ#about-the-company, 1 $ = INR 86.63

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12.https://tracxn.com/d/companies/pilgrim/__E07z1FauxS065CG7fvDMqwBjI6Bx_3KgKfoNYsWbn48#about-the-company, 1 $ = INR 86.63