Illustration: Aïda Amer/Axios

The Federal Trade Commission said Monday it would sue to block Edgewell, the maker of Schick razors, from buying Harry's, which sells shaving products by subscription.

Why it matters: "Disruptors" like Harry's — companies that aim to reshape stable markets with new products or tactics — often end up selling to bigger, more established brands. If the FTC's move discourages that, the advertising and marketing industries might take a bite, since many of those companies rely heavily on digital marketing to grow.

The big picture: Most direct-to-consumer (DTC) upstarts launch with venture-capital investments, and aim to eventually reward investors by going public or by selling to another company.

  • The FTC's intervention could make it harder for companies to sell.
  • At the same time, DTC companies have struggled in public markets, making it less likely for some of them to see going public as a viable option.

Be smart: Most DTC companies spend lots of money on digital ads to acquire customers, and put off worrying about turning a profit.

  • If opportunities to either sell or go public seem less likely, those brands may have to proceed with more caution.

By the numbers: It's hard to directly attribute how much DTC brands spend on marketing, because the category is hard to define. The Kantar consultancy estimates that the top 300 DTC brands spent roughly $4.5 billion on advertising from January to September 2019.

Yes, but: "DTC companies which are not themselves efficiently growing (meaning: profitable at a modest scale) are always going to be relatively less attractive to buyers, regardless of the buyer’s position in a given market," says veteran advertising analyst Brian Wieser, the global president of business intelligence at GroupM agency.

  • "A bigger issue to consider is that incumbents in consumer goods are not necessarily going to want to overpay for start-ups that built scale that won’t necessarily last, or scale which is not as profitable as the traditional businesses those incumbents are in, even if they are growing slowly. "

What's next: Wieser suggests that it could be that the exits are still likely to occur if the buyers "are more broadly focused consumer and packaged goods companies who want exposure to a new sector."

Go deeper: Shaving giants sweep up the disrupters

Go deeper

Political world reacts to Biden tapping Kamala Harris as running mate

Sen. Kamala Harris and Joe Biden at a campaign event in March. Photo: JEFF KOWALSKY/AFP via Getty Images

Democrats from across the party — including some of the women on Joe Biden's vice-presidential shortlist — are championing his historic appointment of Sen. Kamala Harris as his running mate.

What they're saying: "Joe Biden nailed this decision," former President Barack Obama wrote in a lengthy statement. "By choosing Senator Kamala Harris as America’s next vice president, he’s underscored his own judgment and character. Reality shows us that these attributes are not optional in a president."

Updated 1 hour ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Global: Total confirmed cases as of 4:30 p.m. ET: 20,166,415 — Total deaths: 738,266 — Total recoveries: 12,388,925Map.
  2. U.S.: Total confirmed cases as of 4:30 p.m. ET: 5,124,050 — Total deaths: 164,329 — Total recoveries: 1,670,755 — Total tests: 62,513,174Map.
  3. States: Florida reports another daily record for deaths State testing plans fall short of demand.
  4. Axios-Ipsos poll: 1 in 2 has a personal connection to COVID-19.
  5. Business: Moderna reveals it may not hold patent rights for vaccine.
  6. 🏈 Sports: Big Ten scraps fall football season.
Updated 1 hour ago - Sports

PAC-12 and Big Ten postpone fall sports due to coronavirus

Photo: Joe Robbins/Getty Images

The Big Ten and Pac-12 announced Tuesday that they've voted to postpone their 2020 fall sports seasons, including football, due to risks posed by the coronavirus pandemic, hoping instead to play in the spring.

Why it matters: The move from two of the most prominent conferences in college sports will almost certainly prompt other Power Five leagues to follow suit.