SAN FRANCISCO — Sand Hill Road venture firm Grafted Capital is reportedly reevaluating its lead position in the $40 million seed round it closed last spring for Merkin, a direct-to-consumer luxury pubic hair care startup, following what one partner described Wednesday as “some genuinely disappointing early data out of the São Paulo market.”
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The company, which raised at a $220 million post-money valuation on the strength of what its pitch deck termed “an entirely untapped grooming category,” launched its flagship product — a $34 pH-balanced shampoo marketed under the tagline For The Part Of You That Matters Most — in Brazil in October, in what founder and CEO Blake Ostenfeld described at the time as “an obvious first move into an underserved international market with strong hair-care spending fundamentals.”
Sales, sources confirmed, have been catastrophic.
“We were told the TAM was massive,” said one Grafted partner, speaking on condition of anonymity. “We were told there were 220 million Brazilians and that they all had, quote, hair down there. We did not, at any point during due diligence, think to ask a follow-up question. In hindsight, one or two follow-up questions may have been warranted.”
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The follow-up questions, sources confirmed, would have revealed that Brazil is the country in which the fully hairless bikini wax was invented, popularized, and normalized across nearly all age groups over the past thirty years, and that the percentage of Brazilian women who maintain any pubic hair at all is, per a 2023 dermatology survey, approximately 8%.
Merkin’s Brazilian sales team, hired locally at considerable cost, reportedly attempted to communicate this to leadership during the pre-launch phase.
“They said something,” Ostenfeld confirmed Thursday, sitting in the company’s SoMa office in a fleece vest. “They said something in a meeting. I don’t remember what. I was, honestly, distracted by the deck for the Series A. In fairness to me, we had a lot going on.”
Ostenfeld, a 29-year-old former product manager at a mattress startup, founded Merkin in 2023 after what he described in a Medium post at the time as “a moment of real clarity in the shower.” He has no background in dermatology, cosmetics, personal care, or international consumer research. He does, however, have a Stanford MBA and what one investor described as “just, like, phenomenal deck energy.”
The company’s other markets have performed slightly better. In the United States, Merkin has sold approximately 4,000 units, largely to what Ostenfeld described as “our core demographic,” which he defined as “guys who are, like, really thinking about their body.” Sales in Germany have been described as “encouraging.” Sales in South Korea have not yet begun, pending what a spokesperson described as “cultural research we probably should have done up front.”
Grafted Capital, meanwhile, has not yet decided whether to participate in the planned Series A. The firm’s investment memo from last spring, obtained by reporters, described Merkin as “a category-defining play in a market with essentially no incumbents.” The memo did not, at any point in its 47 pages, address why there were no incumbents.
Ostenfeld, asked whether he had considered pivoting the company, was reportedly unmoved.
“We’re still very bullish on the space,” he said. “The category exists. The need exists. The product works. We just need to find the right customer.”
He paused.
“Not Brazil,” he added. “We now know that.”