U.S. online wholesale retailer Boxed is exploring strategic options, including a sale or going public through a merger with a blank-check acquisition company that could value it at around $1 billion, according to people familiar with the matter.
Referred to by some of its customers as Costco for millennials, New York-based Boxed offers everything from fresh groceries to office supplies without membership fees, and also provides free delivery for orders over $49.
Like many e-commerce businesses, it has benefited from a boom in online sales in the United States as consumers stay away from brick-and-mortar stores due to the COVID-19 pandemic. Boxed has seen an steady uptick in new customer signups since March, one of the sources said.
The company has hired investment bank Citigroup Inc to advise on the sale, the sources said, requesting anonymity as the matter is private.
The company has held discussions with potential buyers including so-called special-purpose acquisition companies (SPACs), the sources said, cautioning that it is possible no deal will ultimately materialize.
Boxed and Citi declined to comment.
A merger with a SPAC has emerged in recent months as an increasingly popular alternative to initial public offerings. The likes of sports betting platform DraftKings Inc and electric vehicle maker Nikola Corp have gone public this year through reverse mergers with SPACs.
Seven-year-old Boxed has raised over $240 million in funding from investors including American Express Co and GGV Capital, and was last valued at $600 million in 2018, according to PitchBook.
Last year, former Amazon.com executive Prentis Wilson joined Boxed as president to run its core wholesale business.
E-commerce sales in the United States grew 44.5% in the second quarter, the fastest growth in over two decades, according to the U.S. Department of Commerce.
Wish, another popular shopping app known for selling bargains, said on Monday it has filed confidentially to go public.
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