After various acquisition offers didn’t work out, club-based grocery and CPG ecommerce startup Boxed has secured a $110 million funding round, validating the company’s technology and market position as the e-grocery space continues to heat up.
The funding round was led by Aeon Group, one of Japan’s largest retail chains, which will also be a technology partner. Other participants included Alpha Square Group and CDIB Capital. The deal values Boxed at about $600 million, according to the New York Times.
Chieh Huang, founder and CEO of Boxed, said the company’s hardware and software capabilities, plus a network of four fulfillment centers, allow it to fulfill 90% of domestic customer orders in two days or less. In addition to the acquisition offers, he said Boxed has been approached about licensing its technology – like Kroger recently did with UK-based e-grocer Ocado – but added the company is not “actively pursuing” that course.
“As the retail and grocery industries become increasingly competitive, we’ve received quite a bit of interest,” Huang said. “Some companies are interested in our full stack, everything from our front-end mobile app to our machine learning algorithm, ad platform and in-house robotics. Others are interested in a more limited set. But for now, we’re focused on expanding these technologies ourselves to make them the best they can be.”
Huang said the new capital will be used to ramp up automation and robotics in its four FCs (New Jersey, Dallas, Las Vegas and Atlanta) as well as to expand its network; locations are being scouted in the Chicago area. While Boxed is focused on several markets with the greatest expansion potential it is paying particular attention to Dallas, Charlotte, NC and San Diego.
“We’re focused on expanding our national footprint, generating brand awareness in our priority local markets,” he said.
Huang said the Aeon relationship will help Boxed expand into other markets as both partners share data and technology. He added the two companies will collaborate on fulfillment logistics, robotics and AI-driven data usage, among other things.
“With this investment, we’ll help accelerate Aeon’s digital transformation,” Huang said. “International expansion has always been our vision, so this is also a way to test out the warehouse club model overseas — the partnership is mutually beneficial. We believe we can help Aeon become more efficient while also leveraging their expertise to aid in our expansion efforts.”