Online bulk-products retailer Boxed.com premiered as a public company today after closing a merger with special purpose acquisition company (SPAC) Seven Oaks Acquisition Corp.
Also on Thursday, New York-based Boxed announced a partnership to integrate its e-commerce grocery platform with a range of solutions from online technology and services giant Google.
In mid-June, Boxed announced plans to become a public company through a merger with Seven Oaks. SPACs are publicly listed shell corporations formed to raise funds through initial public offerings to acquire private companies, thus making them public. Seven Oaks shareholders approved the transaction on Dec. 7 following clearance from Boxed shareholders. The new company, Boxed Inc., began trading on the New York Stock Exchange effective Dec. 9 under the ticker symbols BOXD (common stock) and BOXD WS (warrants).
"We are eager to use this additional capital to fuel the growth of our B2C and B2B platforms." — Chieh Huang, Boxed CEO
Boxed Inc. is led by current Boxed co-founder and Chief Executive Officer Chieh Huang as CEO, with Seven Oaks Chairman and CEO Gary Matthews serving as chairman. As part of its plan to go public, Boxed aims to monetize its end-to-end e-commerce platform via a software-as-a-service offering.
“We are thrilled to announce the completion of our business combination with Seven Oaks and advance to this next chapter as a public company,” Huang said in a statement. “Today represents a significant milestone in our journey. We are eager to use this additional capital to fuel the growth of our B2C and B2B platforms, where we plan to drive customer acquisition, further enhance our loyalty programs, thoughtfully expand our product assortment, continue to help the world stock up through our breakthrough technology and, importantly, invest in our high-margin Software & Services business.”
The business combination enables Boxed to raise about $198 million in gross cash proceeds from a combination of Seven Oaks’ cash in trust of approximately $78 million, as well as a $120 million fully committed private placement financing, New York-based Seven Oaks reported. In the transaction, no secondary shares were sold by existing Boxed shareholders. When the merger was announced, the companies said Boxed’s equity holders will own about 62% of the company after the deal was finalized. New York-based PJ Solomon served as Boxed's financial adviser for the transaction.
“We are proud to have a role in bringing a high-quality, socially conscious company like Boxed to the public market,” Matthews commented. “Chieh and the Boxed management team are extremely talented, and we believe the company has a leading e-commerce platform with significant competitive advantages and opportunities to accelerate growth that will drive value creation for stakeholders over the long-term.”
Founded in 2013, pure-play online retailer Boxed provides warehouse club-style shopping — including groceries, pantry items, household staples, health and beauty aids, office supplies, and a variety of organic and green products — through its website and mobile app. Consumers and businesses can purchase club-sized packages with free two-day delivery in the continental U.S. on purchases of over $49, without the membership fees of traditional warehouse clubs. It also offers Boxed Express, an on-demand delivery service for perishables.
Boxed generates big customer baskets, with an average of eight items for a value of about $100 per order, and its expanding BoxedUp paid subscriber base provides a loyal, recurring revenue stream, according to Seven Oaks. Meanwhile, Boxed’s B2B customers range from small and midsize businesses to Fortune 100 enterprises, and its technology encompasses the customer-facing front-end, back-end operational software and homegrown automation robotics for fulfillment.
Late last month, Boxed also unveiled plans to enter the fast grocery delivery arena with a deal to acquire New York City online grocer MaxDelivery. Serving most of Manhattan, MaxDelivery offers delivery in less than an hour from a selection of more than 10,000 food and grocery items — including fresh produce, organic meat and dairy products, local gourmet and specialty foods, wine and spirits — as well as nonfood products like over-the-counter medicines and everyday home and office supplies. Plans call for MaxDelivery to adopts Boxed’s e-commerce technology and services for more scalable operations and expansion into additional markets.
Through the Google partnership, Boxed said it aims to further integrate with Google Cloud to spur innovation across its platform and enhance the customer journey. Under an updated licensing agreement, the e-tailer will tap Google Cloud’s advanced cloud computing, data analytics and artificial intelligence technology to unlock new value and bolster consumer brand relationships in e-commerce.
On the B2B side, Boxed expects Google technology to sharpen its operational capabilities, deliver more value to enterprise clients and source new customers for Software & Services business.
“Google Cloud is the ideal platform for Boxed to creatively and nimbly bring the best possible customer experiences to market,” according to David Miller, chief technology officer for Boxed. “Our team views Google Cloud as best-in-class on which to develop new and better capabilities in the e-commerce space for B2C, B2B, retail and software solutions for our customers and partners worldwide.”
Boxed said Google Cloud solutions will enable it to build more personalized products, speed supply and demand planning decisions, and improve service reliability, as well as create scalable e-commerce capabilities and develop new services and offerings that will differentiate the company in the marketplace.
“We’re proud to support Boxed, a truly innovative industry player in retail, in its efforts to build a platform that brings new and improved features to retailers and ultimately improves the shopping experience for consumers,” stated Carrie Tharp, vice president of retail and consumer for Google Cloud at Mountain View, Calif.-based Google.