Dive Brief:

• With skincare continuing its rise, Unilever has agreed to acquire skincare brand Paula's Choice, the company announced on Monday. The deal is expected to be closed by Q3 in 2021.

• Unilever noted that Paula's Choice, a DTC skincare brand founded in 1995, creates content and digital tools to provide easy-to-understand information on the science behind its skincare. The brand made an "Ingredient Dictionary," which explains research on almost 4,000 ingredients, and also runs an "Expert Advice" hub, which provides curated skincare and ingredient information, per the company announcement. 

• Sunny Jain, Unilever beauty and personal care president, said in a statement that Unilever is looking to grow its portfolio in the high-growth skincare segment.

Dive Insight:

Skincare is the word of the day in the beauty space, as the return of the makeup category remains uncertain. Over the past year or so, Unilever has responded to the category's strength by focusing on DTC skincare brands. The company has invested in three skincare companies in that timeframe, following a broader trend of established companies supporting emerging brands.

"Paula's Choice is a true pioneer in the digital space for beauty and has created a mission-based brand rooted in truth and transparency," Vasiliki Petrou, Unilever executive vice president and CEO of prestige, said in a statement. "We can't wait to introduce the brand and its iconic products to an even bigger audience."

In 2016, Unilever made waves for acquiring Dollar Shave Club, a success story that has been hard to replicate by the razor brand's DTC peers, Billie and Harry's. As Unilever acquires and invests in up-and-coming beauty and personal care brands, others in the space are bringing in capital, launching new products and partnering with established retailers in pursuit of growth. Both Heyday and Maëlys have recently raised funds to expand their reach. In June, clean DTC hair care brand Vegamour partnered with Sephora to sell its new Vegamour Gro collection on the cosmetics retailer's website, and DTC personal care brand Native released a line of face and body sunscreens in April.

In addition to the Paula's Choice acquisition, Unilever has made other changes to how it's approaching the beauty space. In January 2020, Unilever and its subsidiary Sundial Brands launched a multicultural hair care line for Gen Z consumers in partnership with Target, and earlier this year, the company opted to stop using the word "normal" in its beauty and personal care marketing and packaging as part of its Positive Beauty initiative.