Strapped for financing, online bulk-products retailer Boxed Inc. said it’s exploring a range of strategic options, including a possible sale of the company.
New York-based Boxed announced the plan Thursday and noted that the company also is “actively exploring capital-raising initiatives” and expects to unveil additional funding within the next 45 days. Investment banks Cowen and Solomon Partners have been retained as financial advisers to help Boxed assess its strategic alternatives.
“There are two main points to it. We continue to actively pursue financing and, as we explore capital-raising initiatives, we have a duty to our stockholders to explore all the options available to us. So that includes a potential sale of the company, potentially partnering with other folks, potentially a merger,” Boxed CEO Chieh Huang told Winsight Grocery Business in a phone interview on Thursday. “All those different things come into focus as we pursue financing because, now that we’re a public company, we have a fiduciary duty to the stockholders to say, ‘Hey, we explored all the options.’”
Huang had said in an interview last month that Boxed would soon announce plans to buttress its financing. In October and November, the company received delisting warnings from the New York Stock Exchange as its stock price and market capitalization fell below required levels. To rectify the situation, Boxed said at the time that it would weigh various options, including a reverse stock split, subject to shareholder approval.
Founded in 2013, Boxed in June 2021 unveiled plans to go public through a merger with special purpose acquisition company (SPAC) Seven Oaks Acquisition Corp. The new company, Boxed Inc., began trading on the NYSE effective Dec. 9, 2021, under the ticker symbols BOXD (common stock) and BOXD WS (warrants). Boxed is led by current CEO and co-founder Huang, with Seven Oaks Chairman and CEO Gary Matthews serving as chairman.
Boxed provides warehouse club-style shopping—including groceries, pantry items, household staples, health and beauty aids, office supplies, private label, and organic and natural products—through its website and mobile app, but without the membership fees of traditional wholesale clubs. For investors, Boxed brings to the table a robust B2C and B2B retail business and a comprehensive e-commerce platform offered via a software-as-a-service model.
According to Huang, Boxed’s financing efforts have been hampered by a difficult market for technology-driven companies. Tech stocks took a beating in 2022, and companies such as Amazon, Netflix, Meta, Twitter, HP, Cisco, Salesforce and Microsoft, among others, have announced layoffs.
“We’re in a world where technology companies are certainly not being rewarded with the multiples that we saw in years past. And there has been a lower sentiment than in years past on e-commerce companies as well. So when you look at what we do both in e-commerce and technology, I think unfortunately we’re caught right in the middle of that storm,” Huang said Thursday. “I think it’s really hard to fight back in that kind of macro environment right now.”
In terms of growth drivers, Boxed has cited B2B customers, the Boxed Up loyalty program and the Boxed Market fresh grocery fast-delivery service on the retail side and its Spresso software and services unit on the technology side. Leveraging artificial intelligence, Boxed’s platform offers retailers and other businesses an end-to-end, modular software stack for storefront, marketplace, B2B, advertising and fulfillment.
Huang noted Thursday that he remains bullish on how Boxed is positioned as a company, based on the full tech stack it offers “as both a retailer and a retail enabler.” He said Boxed is open to discussing various alternatives with potential partners.
“We’re having very active conversations, and we just wanted to let everyone know that, to really maximize potential stockholder value, we should lay it all on the table and see what the best option is,” Huang said. “We always have the customers and the stockholders in mind.”