Procter & Gamble, the consumer packaged goods conglomerate known for such household staples as Tide and Old Spice, will acquire Walker & Company Brands, the health and beauty startup launched by entrepreneur Tristan Walker just five years ago.
While the financial terms of the deal were not disclosed, other details were: Within the first half of 2019, Walker and his current team of 15 employees will relocate to Atlanta—not Cincinnati, the home of P&G headquarters—and will continue working on its brands, Bevel and Form, as a wholly owned subsidiary with Walker at the reins as CEO. He’ll report directly to Alex Keith, president of P&G’s global haircare and beauty business.
“We’ve always had the vision to make health and beauty simple for people of color,” Walker says. “But now we get to accelerate that vision with the many capabilities Procter & Gamble has to offer. I’m not going anywhere. We’re not going anywhere.”
For those who’ve followed the career of Walker, the merger with P&G might read as the conclusion of a storied journey. Walker, who has cultivated for himself an image as a beacon for more racial diversity in Silicon Valley, is one of the most visible African-American executives in tech, counting among his funders Andreessen Horowitz, in addition to cofounding Code2040, a not-for-profit that connects young minorities to coding jobs. While it’s true that he professed his ambitions to become the “Procter and Gamble for people of color” in my profile of him four years ago, he has largely carved that path guided by Silicon Valley sensibilities, from ingratiating himself with the Bay Area elite to employing a direct-to-consumer model for Bevel—Walker’s flagship brand, a suite of shaving products that reduces skin irritation, common among men of color—just as glitzy startups like Warby Parker, Casper Sleep, and Glossier had done.
“Yes, we happen to be in Silicon Valley and, yes, we happen to do things from a technology perspective to help us accelerate our vision, but we’ve always been a forward-looking consumer packaged goods company,” says Walker. “Our moving from Silicon Valley doesn’t change that.”
The truth is, Walker has only in recent years begun eschewing the label of “tech startup.” He turned a few heads at Recode‘s Code Commerce conference in March of last year when he told Kara Swisher, “When I started, I said we’re a tech company. That’s bullshit.”
He’s moved deeper into the CPG world, inking a deal in 2015 to sell Bevel products in Target stores a la carte—a model which came to comprise nearly half the company’s revenue—and last year launched Form, a 10-product haircare line that Walker & Co. recommends to consumers based on an online survey about hair-affecting factors like geography and exercise habits. Form received rave reviews, but Walker lacked the resources to properly promote the product. Meanwhile, competitors such as Harry’s—which bought a $100 million razor factory less than a year after its founding—delivered on the type of fast-growth metrics that venture capitalists crave, zipping to a nine-figure valuation. (Soon Harry’s even installed giant displays that bookended the very Target aisles where Bevel products were sold.)
While some might consider the deal as simply the latest in a string of black-owned health and beauty companies getting snatched up by non-black-owned multinationals—see Sundial Brands’ sale to Unilever last year—the move means that resources like marketing and distribution are unlikely to be a worry for Walker going forward as a subsidiary of P&G, which today has a $230 billion market cap, and which AdAge recently ranked second (to Samsung) in global ad spend.
“When you consider growth percentages and metrics and that sort of thing, while it’s a good signal for the health of the business, it’s not necessarily the greatest signal for one’s belief that you’re building a beloved brand with staying power,” says Walker. “We’re six years old; Procter & Gamble is 180. There’s so much we can learn from them. We haven’t even scratched the surface yet.”
For as much as Walker & Co. will learn from its new parent, P&G also stands to gain substantially from this acquisition and others like it. (Earlier this year it bought First Aid Beauty, a skincare brand for sensitive skin, for a reported $250 million, as well as natural deodorant brand Native in 2017 for an undisclosed sum.) Similar to the incompatibility that Walker experienced in Silicon Valley, Procter & Gamble has experienced a reckoning of its own, as it struggles to figure out how to create the next multibillion-dollar brand in a world when the most innovative shampoos, contact lenses, and toothbrushes are now built with just a few million dollars in Facebook ads, cheaper materials, and more direct relationships with customers. In fact, P&G was forced to slash Gillette’s prices last year by an average 12% in order to compete with the cut-rate razors sold by Harry’s and Dollar Shave Club, now owned by P&G’s major competitor, Unilever. (In the meantime, Harry’s recently launched a new woman’s brand, Flamingo, in a bid to become something of a direct-to-consumer P&G.) While P&G sees $4.5 billion in e-commerce sales today, overall sales for the fiscal year ended June 30 were up only 1%. It’s tested direct-to-consumer subscriptions—one for Tide Pods, for example—and executives say they’re eager to learn more from the agility displayed by Bevel.
“[When it comes to] direct-to-consumer, we have the capabilities here, but nowhere near the extent he’s mastered and leveraged,” Lela Coffey, brand director for multicultural marketing at P&G, says of Walker. “His agility is super-fast. The amount of products he’s been able to bring to market, we need to learn something about that speed.”
The corporation announced in November its largest reorganization in 20 years, a move that will divide operations across six industry-based “sector business units,” which executives say will “provide a much cleaner slate” for Walker to continue growing Bevel and Form. That includes leveraging the giant’s $2 billion R&D budget for Walker to dive deeper into hair innovations for people of color and see them fully realized. (Months before Form was released, for example, Walker had confided to me the full plan for the brand: A consumer would mail the company a strand of her hair, have it microscopically analyzed for health and type, and receive the recommended products in the mail. A shortage of capital resulted in the scaled-back launch.)
“A lot of his focus has been on Bevel, and I think the next thing he really intends to do is grow Form in the way he originally intended,” says Coffey, who also oversees Pantene’s Gold Series and Royal Oils by Head & Shoulders, both of which are targeted toward multicultural consumers with curly or natural hair. “Powered with what we can bring to bear, I’m excited to see what he’s going to do.” (Walker, who recently launched a “beard balm” line for Bevel, also has plans for a skincare line in early 2019.)
In addition to speed and innovation, Procter & Gamble is also buying Walker’s cultural cachet. Part of the work of oiling the joints of P&G’s nearly two-century-old machinery is infusing the company with relevancy and authenticity, especially among black millennial men—an audience that P&G has yet to lock down and which Walker has developed since he first launched Bevel. He accomplished that via the popular Bevel Code newsletter and blog, pop-up experiences at venues like Barclays Center and Afropunk, or Walker’s relationships with artists like Nas (an investor) and DJ Khaled (who once posted a Snapchat video of himself getting a shape-up with the Bevel Trimmer). It’s also the reason they’re allowing him to stay in Atlanta—the so-called “black mecca”—which Walker says accounts for the largest percentage of his customers by location. “Having him in a place where the trends are being set, where the thought leaders are, where he can recruit some great talent, I think you couldn’t ask for a much better spot than Atlanta,” says Coffey, who also sees the move as part of an ongoing initiative for P&G to attract younger and more diverse employees.
For Walker—who has journeyed from Stanford Business School to Twitter to Fourquare to Andreessen Horowitz to his startup HQ in Palo Alto, California—the move to Atlanta is much more nuanced. Symbolic, even. “When I think about my consumers, they are in the southeast, they are in Atlanta,” he says. “When I consider things like how my son is raised, I want him to be around a supporting network of aspiring, forward-looking black folks.” Walker points to figures like Arlan Hamilton, founder of Backstage Capital, and PlayVS founder and CEO Delane Parnell—as well as Code2040, which stays in San Fran—who, intentionally or not, will remain examples in the case against homogeneity in the tech industry.
“While I am thankful for what Silicon Valley has afforded me, this is the right move for the company, and on behalf of the people that we serve,” he says. “This is not about me.”