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Big Companies Grab Direct-To-Consumer Startups That Fail To Secure Huge Investments

August 29, 2018: 12:00 AM EST
During the first eight months of 2018, Investors have placed a $1.2 billion bet on business startups that use the direct-to-consumer model to sell products. However, there has been several large acquisitions of DTC startups that have received little or nothing at all before being acquired. For example, natural deodorant brand Native failed to secure venture capital but instead received $550,000 from small investors, according to company founder Moiz Ali. Two years after creating his company, Ali sold Native to Procter & Gamble for $100 million in cash, while remaining CEO. Other deals involving acquisition of DTC startups include watchmaker Movado's plan to purchase DTC watch startup MVMT for as much as $200 million, with $100 million in cash, and mattress company Serta Simmons' plan to merge with Tuft & Needle, a startup that makes and sells foam mattresses in a box and sells them directly to consumers.[Image Credit: © Gerd Altmann]
Jason Del Rey, "The rise of giant consumer startups that said no to investor money", Recode, August 29, 2018, © Vox Media, Inc.
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