Boxed SPAC everything you need to know about Boxed

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Boxed SPAC: What do we know about the Boxed SPAC?

The SPAC could occur later in 2021, with the business earmarked to merge with blank cheque company Seven Oaks Acquisition Corp. The combined company will be known as Boxed Inc. 

The transaction could deliver the company $334 million to fund growth, comprising proceeds from Seven Oaks as well as a variety of investors in common stock and convertible notes.

A potential valuation of $900 million has been reported.

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How much is Boxed worth?

Boxed was worth $600 million as of its 2018 Series D fundraising valuation, when it raised $111 million. However, since then the company has enjoyed a boost in revenues, particularly during the coronavirus epidemic, as well as launching a range of strategic partnerships that may have contributed to a valuation closer to the $900 million goal on listing.

What does Boxed do?

Boxed is a New York-based wholesale retailer that delivers bulk packages of groceries and household items to customers via its website and app. The company uses fulfilment centres around the US to help make deliveries within two days of ordering, and charges no membership fees as traditional wholesalers do.

The company was started in 2013 by mobile gaming professionals Chieh Huang, Jared Yaman, Christopher Cheung, and William Fong, when Huang saw a gap in the market for wholesale product deliveries ordered online.

The original operation shipped products from Huang’s garage in Edison, New Jersey before the company secured a round of seed funding to the tune of $1.1 million. The funds allowed the company to open its first fulfilment centre in the same area with which to facilitate deliveries.

A Series A round quickly followed in 2014 that raised the company a further $6.5 million, and a Series B of $25 million was achieved in 2015. By 2016, the company’s turnover had hit $100 million, and the same year it raised $100 million via a Series C.

The latest round of funding before the IPO saw the company raise $111 million in 2018, which was earmarked for ramping up automation of facilities to improve efficiencies and better service customer demand.   

As of 2021 Boxed has in excess of 200 employees. The company’s net revenue was $187 million for 2020, according to its latest investor presentation, with a goal for $1 billion in sales by 2026.

Who are Boxed’s competitors?

When it comes to Boxed’s competitors, it would be logical to suggest that Costco is chief among its wholesaler rivals. However, Huang has asserted that the company has a ‘brand-new audience’ comprising a younger customer base that doesn’t shop much at Costco.

A better comparison might be online grocery delivery operations Instacart, Getir and FreshDirect, which all started with quick and easy online deliveries at the heart of their offering, although Boxed enjoys a higher average order due to being set up for bulk purchases. Of these operators, Instacart is the largest by revenues with $1.5 billion in sales as of 2020.

How does Boxed make money?

Boxed makes money by purchasing products directly from manufacturers and selling them on to businesses and consumers for a profit via its app technology and fulfilment centres. The company has said it is able to make money through a lean cost base, with a focus on cutting out unnecessary intermediaries, as well as focusing on higher mark-up items that can be easily shipped. 

What is Boxed's business strategy?

Boxed’s business strategy of fast and easy delivery of a range of items is dependent on advanced and often proprietary technology, from robotics in fulfilment centres to keep costs down to sophisticated predictive analytics to help the company forecast what business customers are likely to need.

But the focus on automation doesn’t mean the company skimps on investing in staff; benefits include $20,000 contributions towards weddings and comped tuition fees for the children of workers, highlighting an ethos of employee care for increased morale.

The company also continues to seal strategic partnerships to boost its rate of growth. These include its 2019 partnership with German supermarket Lidl, where Boxed licensed its technology and enabled access to Lidl customers. Another prominent deal was signed in January 2021 with Japan's largest supermarket chain, Aeon, to develop its e-commerce network in Malaysia through the provision of a storefront platform and inventory-picking software.

Boxed has also branched out into selling digital advertising and provides a marketplace online for third-party sellers.

With the proceeds of the SPAC Boxed will, among other growth initiatives, aim to monetise its proprietary, end-to-end e-commerce technology via a software-as-a-service (SaaS) offering.

Is Boxed profitable?

The profitability details of Boxed are not in the public domain, with information limited to a gross margin disclosure of 14%, with a goal of 30% by 2026.

Who owns Boxed?

The ownership of Boxed is split between the founders and various other individuals, as well as venture capital and other institutions. Bali Venture Partners CEO Dan Schryer and French entrepreneur Gabriel Naouri hold a stake, as does Aeon, in addition to financiers such as CDIB Capital and Nomura Securities.

Who are the directors of Boxed?

Chieh Huang - CEO

Christopher Cheung– Co-founder

Jared Yaman – Co-founder, Chief Operations Officer

William Fong – Co-founder, Chief Technology Officer

Rhonda Ramparas – Chief Financial Officer

Alison Weick – Chief Marketing Officer

Anthony Oland – Chief People Officer

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