Boxed Wholesale rejected a $400 million acquisition offer from Kroger Co., and will pursue a new funding round to remain private.
Bloomberg reported that the startup’s board voted recently to reject the offer from Kroger and that it had preliminary talks with Amazon.com Inc., Target Corp. and Costco Wholesale Corp. Kroger however, was the only one to submit a bid.
Boxed.com, which has warehouses in New Jersey, Dallas, Las Vegas and Atlanta, was founded by Chieh Huang in a New Jersey garage in 2013. It is now a $100 million-a-year seller of bulked goods to both businesses and consumers and controls its own warehouse and distribution system.
The company has differentiated itself from the likes of BJ’s, Costco and Sam’s Club by foregoing the standard membership fees and offering free domestic shipping on orders of $49 or more. It did this by signing exclusive deals with brands to sell only one kind of certain items, thereby locking in more attractive prices.
Last year, Boxed went DIY with its fulfillment center robotics and created an AI tool that can let a customer know when they’re running low on an item, prompting them to reorder. For B2B customers, the reorder process can be automated.