- April 3, 2023
- 3 minutes read
Online Grocer Boxed Files For Chapter 11 Bankruptcy
It’s yet another day and another company that went public during the special-purpose acquisition company (SPAC) boom has bitten the…
It’s yet another day and another company that went public during the special-purpose acquisition company (SPAC) boom has bitten the dust. Boxed Inc (NYSE: BOXD), an online wholesale grocery retailer, has filed for Chapter 11 bankruptcy protection in a U.S. court.
Boxed says it will shut down its retail operations in the coming weeks and seek a sale of its software unit, Spresso, which provides price optimization tools for online retailers.
- Boxed went public in December 2021 by merging with Seven Oaks Acquisition Corp. The merger valued Boxed at $900mn and handed the company $198mn in cash proceeds to scale its operations. That figure apparently wasn’t enough to maintain a struggling business for barely a year and three months.
- Boxed is the latest addition to a list of companies that went public via SPAC mergers and filed for bankruptcy shortly after. Other notable members include electric carmaker Electric Last Mile, Bitcoin miner Core Scientific, drug developer Clarus Therapeutics, and internet service provider Starry.
- Some other notable SPAC mergers ended up in a fire sale, such as warehouse robotics maker Berkshire Grey, which recently agreed to sell to Japan’s SoftBank Group for $375mn, compared to a $2.2bn valuation at the time of its merger.
Boxed was founded in 2013 as an online retailer of bulk-sized groceries and household products. It was akin to an online version of Costco, the famous wholesale retail chain. The company raised over $200mn in private funding and roughly the same amount from its SPAC debut, but that wasn’t apparently enough to sustain its loss-making business; Boxed reported net losses of $69mn, $34mn, and $65mn in 2021, 2020, and 2019 respectively.
Boxed’s shares had already lost over 90% of their value since the company’s listing, and the bankruptcy filing represented the final nail in the coffin.