Men's skincare brand Disco struggled to raise capital and finally succumbed to mounting debt as its debt provider foreclosed. The brand filed for Chapter 7 bankruptcy and has shut down.
WHO: Launched in 2019 by Benjamin Smith, Disco is a clean science-backed skincare brand with solutions created for men. The brand was sold at Nordstrom and on Amazon.
WHY: The brand raised over $8 million in funding while the company was “a successful growing business” from 2020 to 2021. However, during 2022 and 2023, the brand struggled to raise more capital to fund the company. Disco’s mounting debt became overwhelming, and its debt provider foreclosed, with the brand shutting down shortly after. The brand had challenges resonating with the male demographic at scale, an overreliance on a hero product, and customer acquisition issues stemming from digital marketing changes associated with Apple’s iOS 14.5 update.
IN THEIR OWN WORDS: “This unfortunate outcome left shareholders with nothing, disbanded our great team, thousands of subscribers were left out to dry, and countless vendors were not paid,” Smith said in a LinkedIn post. “Shutting Disco down resulted in the loss of millions of investor capital from friends, family, close connections, and funds I respect and trust.”
“As our options shrank, my fiduciary obligation as the founder to keep the lights on at all costs kicked in to find us a soft landing,” Smith said. “We attempted to raise capital, underwent 3 failed acquisition processes, and explored restructuring through Chapter 11 Bankruptcy. In a bid to salvage the business, we reduced our burn rate, right-sized our unit economics, and maintained a lean team.”
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