Why Dollar Shave Club Is Unilever’s Instagram

“Dorco’s blades are f*cking great.”

That’s what Michael Dubin really should’ve said in that famous launch video for Dollar Shave Club, the men’s grooming company he founded and just sold to Unilever for a billion dollars. It turns out that DSC doesn’t make its own razors or any of its product; the company actually buys them wholesale from manufacturers to resell. DSC also doesn’t make a profit, at least not yet.

So why did Unilever pay for DSC with the same amount of cash Facebook used to buy Instagram? The answer has to do with content.

If we look at DSC as a media company instead of a manufacturer of men’s hygiene products, it becomes obvious that its value lies in its ability to reach and maintain an important demographic: millennial men. It doesn’t take much digging to justify the media company label, either. Just take a look at DSC’s careers page, which looks a lot more like Vox’s than Procter & Gamble’s.

That’s not necessarily a knock. DSC brings great branding to Unilever and 3 million subscribers, largely a result of cool packing and engaging content, considering it’s just selling wholesale products. While the YouTube videos (and a Super Bowl commercial) draw in new subscribers, DSC keeps them loyal with content like The Bathroom Minutes, a print publication delivered monthly to subscribers alongside razor refills. DSC also sponsors the men’s interest blog MEL, which publishes well-written content that has nothing to do with its brand.

If Unilever really wanted DSC’s product, it could have just gone straight to Dorco. And if it just wanted a subscription service, it could’ve tried to launch its own.

However, as rich as a billion looks on paper, it could seem small for a purchase that brings on millions of subscribers and 16 percent unit share of the razor market, as Ben Thompson points out on Stratechery. To put that in perspective, a little over a decade ago, P&G bought Gillette for $57 billion. Granted, P&G was also investing in factories, logistics, supply lines, R&D departments, and everything else an actual manufacturer needs. But as DSC has gotten stronger, P&G’s market share has dropped 12 percentage points over the last six years.

If you take the industry out of the equation and look at this as a strict content play, a better comparison for the sale price would be other media companies like Instagram ($1 billion) or Tumblr ($1.1 billion) or YouTube ($1.65 billion). Dollar Shave Club isn’t just Unilever’s entrance into the razor market, it’s a new pipeline for Unilever to deliver other products into the hands of a millennial male audience. It could also take the subscription service global since DSC only operates in the U.S., Canada, and Australia. For now, Unilever is just hoping DSC turns out to be more of an Instagram than a Tumblr.

While this might appear like a case of the emperor having no clothes, it’s actually more like the clothes making the man. And Unilever just bought a new wardrobe.