Retail and Direct To Consumer

Boxed Teeters On Brink Of Bankruptcy

Illustration of Magic 8 Ball as earth with Outlook Not So Good fortune

Another day, another high-valuation venture-funded company teeters on the cusp of closure.

Today, it’s Boxed, a one-time startup investor darling that set out to remake the warehouse bulk-buying experience for the online age.

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The New York-based company, which raised over $240 million in venture funding before going public via a SPAC merger 15 months ago, told investors this week that it is contemplating a bankruptcy filing.

In a securities filing, Boxed said it is still pursuing several potential avenues, including an agreement to restructure outstanding debt, a merger or acquisition by another entity, or the dissolution of the company. The company also said it laid off staff and cut operating expenses to reduce overhead.

The news follows steep stock declines for 10-year-old Boxed, which was recently trading for under 20 cents a share, valuing the company below $15 million. Shares have remained below $1 each for over six months.

Times have changed

It’s a sharp contrast to December 2021, when Boxed made its market debut after completing a merger with a special-purpose acquisition company, Seven Oaks Acquisition Corp. The deal initially set a $900 million valuation for Boxed, and included $334 million in cash for the company.

Boxed shares were trading for over $13 each at their peak in late December 2021, weeks after the SPAC merger’s completion. The stock price plummeted in spring of 2022, amid widening net losses for Boxed and a broader selloff in the tech and e-commerce sectors. For Q3 of 2022, net revenue declined as well, contributing to stock price woes.

It’s not looking like a happy ending for a startup once considered a rival for the likes of Costco. For now, however, the Boxed site remains operational, with top products including paper goods and bulk snacks. However, per an article in The Wall Street Journal, the company is actively soliciting proposals for the sale of all or most of its assets to improve its liquidity position.

Prior to going public, Boxed raised funding from a host of well-known venture firms, including Greycroft, Founders Fund, DST Global and GGV Capital.

Illustration: Dom Guzman

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