Boxed is taking bulk e-commerce public
It has been a couple of years since the press was buzzing with news about what might become of successful warehouse-style e-commerce startup Boxed. Now, after an unprecedented shift in the e-commerce landscape due to the novel coronavirus pandemic, the company is going public.
Boxed is merging with a special purpose acquisitions company called Seven Oaks Acquisition Corp. in a deal that will result in a publicly traded company, according to Supermarket News. With the capital it will generate through the deal, the e-commerce company plans to expand its B2B and third-party marketplace offerings and monetize its software-as-a-service platform, which facilitates home delivery.
Beginning in March 2020, Boxed experienced a sudden, massive demand for its services driven by the pandemic. Boxed had initial trouble managing orders for hoarding-prone items like toilet paper, hand sanitizer and wipes, according to a CBS This Morning interview with CEO Chieh Huang. In addition to increased consumer demand, municipalities local to Boxed’s fulfillment centers also began leveraging the company at the height of the crisis.
Mr. Huang told CNBC Squawk Box In November 2020 that Boxed had experienced changes in both customer demographics and how customers were accessing the service. By that point in the pandemic, the user base had expanded from Millennials in coastal cities to people in the suburbs and rural areas. It also saw a 30 percent increase in mobile app usage.
Boxed was promoted as an online wholesale club alternative when Mr. Huang launched out of his parents’ garage in 2013. The company reached $100 million in sales within three years, according to a 2017 CNBC Make It article.
In 2018, during an era when major brick-and-mortar grocery retailers were getting serious about building out their e-/m-grocery presence, a number of big names were reportedly eyeing Boxed for acquisition. Kroger was named as a top bidder, with Aldi, Costco and Target also on the list.
Around the same time, Mr. Hsieh began speaking publicly about the possibility of the startup opening its own brick-and-mortar stores to complement its online presence.
- Online retailer Boxed to go public – Supermarket News
- Forget Kroger, will Boxed open its own stores? – RetailWire
- This e-commerce founder’s company went from $40,000 in sales from his parents’ garage to over $100 million in 3 years – CNBC
- Does a Boxed acquisition make sense for Kroger? – RetailWire
- Grocery delivery start-up Boxed sees soaring demand amid pandemic – YouTube
- Customer demographics have changed during the pandemic: Boxed CEO – CNBC
DISCUSSION QUESTIONS: Do you see a path to profitability for Boxed? Will the company’s B2B, SaaS and marketplace offerings deliver the growth that investors and analysts will demand of it as a publicly traded company?