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Welcome to Dealboard. In this weekly feature, The Current is providing a look at the mergers, acquisitions and venture capital deals making waves in ecommerce, CPG and retail.
This week, there were big consumer brand investments by KDP and WHP Global, while Fanatics and NotCo added to their unicorn valuations. Meanwhile, acquisitions are shaking up categories like ultrafast delivery, snacks and dessert.
Check out the latest deals:
C4 Energy has new fuel. (Photo by Flickr user Mike Mozart, used under a Creative Commons license.)
Nutrabolt gets investment from $863M
Energy drink maker Nutrabolt received an equity investment of $863 million from Keurig Dr. Pepper (KDP) as part of a strategic partnership.
The investment will give KDP a 30% ownership stake in the maker of pre-workout brand C4 Energy, post-workout brand Xtend and sports nutrition brand Cellucor.
Through the deal, KDP will distribute C4 Energy in a majority of its direct store distribution territories, which will expand retail availability.
"This partnership represents a win-win transaction between our two companies,” KDP chairman and CEO Bob Gamgort stated. “KDP gains significant presence in the rapidly growing performance energy drink market and Nutrabolt gains access to a strategic investor with extensive sales and distribution capabilities to further accelerate its growth.”
Fanatics reaches $31B valuation
Sports merchandising company Fanatics raised about $700 million in a new investment round that saw its valuation climb to $31 billion, Footwear News reported.
The round was led by Clearlake Capital, with participation from LionTree, as well as existing investors Silver Lake, Fidelity and Softbank.
Fanatics sells licensed sportswear, sports equipment and other merchandise. This is its second funding round of the year following a $1.5 billion raise in Q1. It also acquired jersey maker Mitchell & Ness, and sports card business Topps.
WHP Global invests in Express, forms omnichannel platform
WHP Global, a firm that acquires brands, will invest $235 million into the retailer Express through a new agreement that will give WHP a 7.4% stake.
The agreement is designed to turn Express into an omnichannel platform that will acquire other brands, and form an intellectual property joint venture that is designed to scale the Express brand through domestic category licensing and international expansion opportunities.
Express’ intellectual property will be valued at approximately $400 million. It will be 60% owned by WHP and 40% owned by Express as it transforms into a platform company.
"Our partnership with WHP will drive greater scale and profitability of the Express brand through their category licensing and international expertise and strengthen our balance sheet,” said Tim Baxter, CEO of Express, in a statement. “We expect to accelerate our growth by acquiring multiple brands in partnership with WHP and operating them on our platform. Both of these are expected to drive shareholder value."
NotCo raises $70 million for B2B food tech
NotCo Founders Matias Muchnick and Karim Pichara.
The Series D1 round was led by Princeville Capital, with participation from Amazon founder Jeff Bezos through Bezos Expeditions, Tiger Global, L Catterton, Kaszek Ventures, Future Positive and The Craftory. Marcos Galperin, the founder and CEO of Latin American tech company MercadoLibre, was also among the new investors. NotCo is valued at $1.5 billion.
NotCo makes an AI platform, called Giuseppe, and has patents on tools that create plant-based foods which have similar taste, texture, functionality and smell to animal-based foods. This has been harnessed to produce food products including NotMilk, NotBurger and NotChicken.
With the new funding, the company plans to build out a B2B model that will offer Giuseppe to other CPG brands, ingredient suppliers and technology providers for innovation purposes as they create plant-based products. This was already on view through a joint venture with Kraft Heinz that develops plant-based versions of Kraft products.
Maergo raises $20M for ecommerce delivery
Maergo, a parcel carrier serving retailers and DTC brands, raised a $20 million seed round.
The round was led by Deep Lake Capital, funds managed by investor and entrepreneur Neel Shah, and ACR Strategic Credit, with participation from RyderVentures, which is the venture capital arm of Ryder System, Inc.
Formerly known as X Delivery, the company has now completed its rebrand under the leadership of former Magento CEO Mark Lavelle. Its customers include Saks Fifth Avenue, Allbirds, Chubbies and Buck Mason.
"The high-growth ecommerce business is a major focus area for us," says Karen Jones, CMO and head of new product development at Ryder, in a statement. "With the growth of ecommerce and resulting capacity constraints, shippers are looking for more flexible parcel solutions. Through Maergo's tech-first approach to parcel delivery, they're leveraging existing capacity to offer an end-to-end solution."
Archive raises $15M for branded resale
The financing was led by Lightspeed Venture Partners, with participation from Bain Capital Ventures, Fernbrook Capital, G9 Ventures, and several minority investors. Alex Taussig, partner at Lightspeed, will join the company's board of directors.
Resale works with brands and retailers to set up resale platforms that are owned by the label. It has set up peer-to-peer, managed and in-store takeback models, as well as added custom features. Brand partners include The North Face, Oscar de la Renta, Cuyana and Dagne Dover.
With the funding, the company plans to hire across engineering and brand success.
Malk Organics raises $9M for alternative milk
Malk Organics, an alternative milk brand, raised $9 million in a Series B round led by Benvolio Group and Rotor Capital. Malk has a line of plant-based milks, including a recently launched chocolate oat SKU. It plans to continue growing its retail presence and its team following the funding round.
Currently, Malk is available at Instacart, Whole Foods, Sprouts, Fresh Thyme and other store stores, with plans to enter Publix in 2023.
MERGERS & ACQUISITIONS
Second Nature's portfolio is getting bigger. (Courtesy photo)
Getir acquired by Gorillas
Consolidation in the ultrafast delivery market produced a big acquisition deal involving two of the biggest European names in the space.
Istanbul-based Getir acquired Berlin-based Gorillas in a deal for which terms were not disclosed.
The deal follows a pullback in investment in the quick commerce space as a result of a post-pandemic leveling of demand and fewer investment dollars as a result of economic headwinds. This has challenged the investment-heavy business models of companies in the space, which are typically spending heavily to keep delivery under an hour.
"Markets go up and down, but consumers love our service and convenience is here to stay. The super fast grocery delivery industry will steadily grow for many years to come and Getir will lead this category it created 7 years ago," says Nazim Salur, founder of Getir, in a statement.
The Ferrero Group acquires Halo Top's maker
The Ferrero Group is set to acquire Wells Enterprises, the maker of ice cream brands including Blue Bunny, Blue Ribbon Classics, Bomb Pop and Halo Top.
Wells will join a portfolio of sweet packaged foods at Ferrero that includes Nutella, Kinder, Tic Tac and Ferrero Rocher. In recent years, Ferrero has acquired Fannie May, the former Nestlé U.S. confectionery business and Kellogg’s cookies and fruit snacks businesses.
Wells will remain a standalone business. It has offices in Le Mars, Iowa, and production operations in Le Mars, Henderson, Nevada, and Dunkirk, New York. Going forward, current Wells CEO Mike Wells will become an advisor during the transition, while current Wells President Liam Killeen will become CEO, with the rest of the leadership team remaining in place. Terms were not disclosed.
RH launches 3 new divisions with acquisitions, hires
Luxury design firm RH made a pair of acquisitions that will allow it to launch new divisions.
The company is acquiring Dmitriy & Co, a custom upholstery atelier. It is also hiring Dmitriy founders Donna and David Feldman. This will allow the company to create RH Couture Upholstery.
RH is also acquiring Jeup, Inc, which is another custom upholstery atelier, and hiring entrepreneur Joseph Jeup. This will allow the company to launch RH Bespoke Furniture.
In turn, the company is launching RH Media, an editorial content platform that will celebrate leaders in architecture and design. It will be led by Margaret Russell, the former editor in chief of Architectural Digest and Elle Decor.
“Today’s announcements, plus our previous acquisition of Waterworks, firmly plant four RH flags at the very top of the luxury mountain, and clearly state our intention of establishing RH as an arbiter of taste and design in the To-the-Trade, luxury home furnishings market,” said Gary Friedman, RH Chairman and Chief Executive Officer, in a statement.
Second Nature acquires Brownie Brittle
Second Nature Brands, a creator of nutritional snacks and treats, acquired snack brand Brownie Brittle from Consumer Capital. Terms were not disclosed.
Second Nature Brands, which is controlled by CapVest Partners, is planning to grow into a diverse snacking platform, and the deal furthers that goal.
“We have ambitious plans to become a US leader in snacks and treats and the acquisition of Brownie Brittle is an exciting step on this journey, which expands our presence into baking and unlocks a new growth stream for us,” said Victor Mehren, CEO of Second Nature Brands, in a statement.
Trending in Retail Channels
The partnership brings together subscriptions and shoppable content.
Roku and DoorDash are teaming up to connect TV and food delivery in one experience.
The news: Roku and DoorDash announced a new partnership that will allow people to order food delivery from a shoppable ad on their TV. Along with the capabilities being put in place by the tech platforms, Wendy’s is also adding shoppable content that will provide a discount on ordering at launch.
How does it work? For Roku account holders, there are three parts to the partnership:
DashPass: DoorDash is providing a complementary six-month DoorDash subscription. Called DashPass, this provides $0 delivery fees on orders from restaurants, grocery and retail stores on DoorDash’s marketplace.
Shoppable ads: Roku viewers will be able to click from their remote to order straight from ads on Roku via offers provided through DoorDash. For the first year, DoorDash will be the exclusive ad solution provider for restaurants on its marketplace to buy shoppable ads on Roku. With this, restaurant advertisers will also be able to work with DoorDash to attribute, target and measure TV streaming ads.
Wendy’s: The companies said Wendy’s also upped its digital capabilities as part of this partnership. The chain will make offers available through the shoppable ads. At launch, it will provide $5 off any Wendy’s purchase of $15 or more.
Key quote from Rob Edell, GM and head of consumer engagement at DoorDash: “While this offer unlocks DashPass benefits and perks for Roku users everywhere, it also provides our merchant partners with an opportunity to promote DoorDash offers through TV streaming. Consumers can conveniently and affordably get the best of their neighborhood delivered to their door, while brands can reach diners at the right time and drive instant conversion from the comfort of the living room.”
What it shows about commerce
The partnership is a sign that several different strategies being employed in digital media and commerce are converging:
Streaming and delivery: Watching TV and ordering food is a common behavior. In fact, Roku research indicates that one in three users order takeout or food delivery weekly. The partnership shows how there is room for the platforms that provide each of these distinct services to work together. It's a reminder not just to monitor how customers use your product, but what other products and services they use with it.
Shoppable ads and subscriptions: As digital commerce grows, there’s interest in reducing the steps between when a user thinks about making a purchase, and when they actually click “Buy.” This partnership does that in a couple of ways. With shoppable ads, Roku viewers can order directly from their TV, and even within the show they are watching. Switching devices may be a barrier, however small, to a sale. On DoorDash’s side, putting a subscription in place means users don’t have to think about logging in or consider delivery fees. This shows how introducing more interactive capabilities to streaming can open up new opportunities for commerce. Roku data shows that 36% of its users are interested in receiving interactive offers, such as a scannable QR code or text message. Such capabilities allow users to take action without switching screens.
Retail media and CTV: On the advertising side, the partnership is connecting DoorDash’s ad network with Roku’s content capabilities. DoorDash operates as a marketplace, while Roku serves ads during streaming content. Both have powerful customer data. DoorDash has purchase-level, or first-party, data. Roku has data on millions of customers, and the ability to reach them while they are doing the common activity of watching TV. The platforms also both have the ability to target users and measurement capabilities that can make this whole system even more powerful. While this partnership sets out one way the companies will work together immediately, it’s a safe bet that the partners will find other areas of mutual benefit to explore.
Further reading: It’s just the latest move by Roku to bring shoppable content to the platform. Last year, the streamer partnered with Walmart to pilot direct ordering straight from shoppable ads.
Is Amazon next? Break down the individual parts of this partnership: Subscription, delivery network, marketplace, streaming platform, advertising capabilities. Amazon owns each of these, and it even has a restaurant delivery partnership with Grubhub. Will it put these parts to work in a similar way? The better question may be, how long until it does so?