Plus, new investment for ghost kitchens, live shopping and recommerce.
Welcome to Dealboard. In this weekly feature, The Current is providing a look at the mergers, acquisitions and venture capital deals making waves in the ecommerce and consumer goods landscape.
This week, a ghost kitchen startup raises $100 million, while a startup named Ghost comes out of stealth. Plus, Amazon makes its third-largest acquisition, social commerce companies raise big funding and Shopify makes a tokengated commerce investment.
Check out the latest:
A Kitchen United location. (Courtesy photo)
Ghost kitchen and restaurant tech company Kitchen United announced on Monday that it raised $100 million in new capital.
Participants in the Series C round included convenience chain Alimentation Couche-Tard/Circle K, grocer Kroger, Canadian fast food holding company Restaurant Brands International, B. Riley Venture Capital, mall owner Simon, real estate company Phillips Edison & Co and the HAVI Group.
Existing investors participating in the round included: Fidelity Investments Canada ULC, RXR, DivcoWest, Cali Group, GoldenArc Capital, General Global Capital and Rich Product Corporation.
Kitchen United founders Harry Tsao and John Miller, Kitchen United CEO Michael Montagano and NFL legend Peyton Manning also participated.
Kitchen United provides “off-premises” restaurants, where operators can tap into its technology and provide grab-and-go service for consumers, or delivery. It currently has 200 kitchens operating across 20 regions.
Going forward, the company plans to continue to focus on Los Angeles, New York City, Chicago and Texas as key markets, while also expanding to additional geographic areas. It also plans to further evolve a multi concept ordering platform that is currently being used by Burger King, Popeyes, Panera Bread and Chick-Fil-A, among others.
Whatnot, a live shopping platform for collectors, raised $260 million in a Series D financing. The round brings the company's valuation to $3.7 billion, growing 2.5x from a $1.5 billion valuation in September 2021.
The funding round was co-led by DST Global and returning investor CapitalG, which is the independent growth fund of Google parent Alphabet. Other participants included BOND, and returning investors Andreessen Horowitz and YC Continuity.
Whatnot provides live shopping experiences for collectors in categories such as sneakers, trading cards, sports cards and memorabilia, rare toys and more. Going forward, it is planning to expand into additional categories, including diecast cars, stamps and action figures.
After growing sales 20x year-over-year in 2021, the company recently added former Citadel Securities executive Xinan Wu as head of infrastructure and former Lyft executive Agnieszka Podsiadło as head of core product engineering. Following the funding round, it will continue to hire in sales, marketing and engineering.
Flip brings content and commerce together. (Courtesy photo)
Social commerce platform Flip said it raised $60 million in a Series B funding round. The financing brings its valuation to $500 million.
The round was led by WestCap, and included participation from existing investors Mubadala Capital and Streamlined Ventures. The company has now raised a total of $90 million.
Flip said it combines “TikTok-like discovery” with the tools of an ecommerce platform. Users learn about products through 60-second, user-generated videos. These videos are shoppable, and provide access to one-click checkout and same-day shipping. When shoppers share their own video reviews, they can then monetize and in turn become creators on the platform.
Following the funding round, the company plans to expand the team, deepen its brand partnerships, and launch a third-party social commerce marketplace this summer.
“No one sells a product better than the customer that has purchased that product multiple times, and we see that every day on Flip,” said Noor Agha, founder and CEO of Flip, in a statement. ”Through our patented technology that dynamically connects digital content to physical products, we’ve developed a seamless discovery-to-purchase cycle where users can shop instantly through content, share their own video reviews of products they’ve purchased, while monetizing their content over time. It’s the beginning of the next era in ecommerce.”
Single offers an app for merchants on the Shopify store that allows creatives to mint a file as an NFT on the Solana blockchain. Then, they can push the NFT directly to a Shopify storefront, and sell it alongside other merchandise. In turn, the fans who purchase the NFT can use it as a digital key to unlock exclusive offerings including merch, audio or video content or livestreams. This process of using NFTs to offer perks is known as tokengated commerce. It not only creates fan club-style exclusive access for creators, but also provides “tangible value” for NFTs beyond ownership in and of itself, said Tommy Stalknecht, founder and CEO of Single, in a news release.
For Shopify, it’s an early sign of an app that uses new tokengated commerce capabilities. The company just launched these web3-forward features as part of its recent product update, known as Shopify Editions.
“Shopify sees NFTs as tools for community building and engagement,” said Chevy Walcott, Corporate Development Manager at Shopify, in a statement. “Our investment in Single and our growing blockchain ecosystem demonstrates our commitment to further grow participation in Web 3.0 and expand commerce possibilities for creatives, artists and musicians.”
The funding round was led by Beringea, with participation from Advantage Capital and existing shareholders.
The Omaha, Nebraska-based company created a marketplace for previously-opened home goods that helps to reduce the likelihood of disposal. Home goods can include larger items, so Rush developed specialized software and built a network to handle these items. The company currently works with 150 manufacturers and brands to handle their online return volume.
Following the funding round, the company will invest in enhancing its technology and growing its network.
Ecommerce giant Amazon made a splash with the acquisition of One Medical, a tech-enabled primary care provider that works on a membership model. The deal was worth $3.9 billion, and is Amazon’s third-largest acquisition to date, after MGM Studios and Whole Foods.
The deal first and foremost has implications for the healthcare industry, as Amazon made plain in its announcement that it feels it is “high on the list of experiences that need reinvention.” However, the subscription model could mean it ends up flowing back to Amazon’s primary and commerce-powered offering for customers: Amazon Prime. With Walmart expanding its own line of health services and Walgreens getting into primary care, don’t be surprised to see this area as a growing category where retailers will seek to add value and innovate.
Biopharma company GSK completed the demerger of its consumer health business, resulting in a standalone company. The move culminated as Haleon started trading on stock exchanges in New York and London last week.
The spinout created one of the largest consumer health companies, as Haleon is now the parent company of brands including Sensodyne, Advil, Robitussin and TUMS. The company will continue to develop brands and will work to remove barriers to everyday health.
Founded by Harry Gestetner, Simon Pompan and social media star Cameron Dallas, FanFix provides access to content from GenZ creators. SuperOrdinary works with lifestyle brands including Farmacy, Joanna Vargas and Olaplex to assist with international development and omnichannel distribution. It has also grown work with creators amid expansion that was catapulted in 2021.
Combining forces will allow creators on the FanFix platform to expand partnerships and monetization opportunities, while providing brands with access to audience and insights. Going forward, the two teams will also seek to build new creator-led brands.
Cincy Brands, a company founded by former P&G executives that acquires and grows brands in the “better-for-you” category, said it made its first ecommerce acquisition.
It is bringing on Vitabox, a seller that offers products including vitamins, personal care products and pet supplies. Along with continuing to grow the retailer, Cincy Brands said Vitabox’s technology and fulfillment infrastructure will serve as the foundation of an operations platform for all of its brands.
Cincinnati-based Cincy Brands is looking to make additional acquisitions this year.
Retail ecommerce management platform CommerceIQ announced the acquisition of e.fundamentals, a UK-based digital shelf analytics platform.
Led by CEO John Maltman, e.fundamentals brings over 450 retailers in 41 countries. In a blog post, CommerceIQ CEO Guru Hariharan said the company’s analytics and store-level availability insights will be added to CommerceIQ’s sales, supply chain, and retail media automations, which are being used by more than 2,200 brands.
“John’s customers were eager to automate the insights and strategies uncovered through their DSA platform. And our CommerceIQ customers were ready to apply the full power of algorithmic retail to all the retailers that mattered to their brand,” Hariharan wrote.
Following the rise of NFTs, Walmart, eBay and Meta are launching new tools to facilitate the exchange of digital goods.
Ecommerce has put the tools of the internet to powerful use, but it has long been centered on the movement of physical goods.
Over the last several years, a new wave of technologists and entrepreneurs have begun to explore the introduction of digital goods to ecommerce, where the value exchange lives entirely in the world of bits, without atoms.
After a period of study and testing, large platforms and retailers are beginning to move ahead with putting new tools to facilitate these transactions into wide release.
The area of digital collectibles is emerging as one of particular interest. Limited edition, collectors’ items have long commanded their own markets. Think of trading cards, action figures, limited-run pressings or the art market as a whole. Now, these are taking digital form. The emergence of tools such as nonfungible tokens (NFTs), which store harness blockchain technology to allow individual versions of digital creations to be available for buying and trading via cryptocurrency, are enabling the beginnings of a new kind of market.
Of the large platforms where ecommerce takes place, eBay has been among the earliest movers in this area. Given that the marketplace is already a place where physical collectibles are exchanged, the extension into digital collectibles makes sense in theory.
eBay has taken steps to put it into practice. The marketplace began allowing buying and selling of NFTs on its platform in 2021. The stated ideas behind the launch made it clear that it saw digital collectibles fitting into the platform.
“eBay has always been the world’s destination for buying and selling the most unique and hard-to-find items - and we’ll continue to be the destination for collectors of all kinds, physical or digital,” said Jordan Sweetnam, SVP and general manager of the Americas for eBay, wrote in an announcement at the time of the NFT expansion in 2021. “This opportunity unlocks new assets for collecting, new ways for people to fuel their passion, and expands eBay’s appeal to a new generation of collectors.”
The marketplace has picked up activity in this area this year. In May 2022, it launched an initial collection of NFTs on the web3 platform OneOf, which were new interpretations of iconic athletes featured on Sports Illustrated covers. In June, the marketplace took another step toward facilitating transactions when it acquired NFT marketplace KnownOrigin, which allows artists and creators to showcase and exchange digital works for collectors.
The eBay vault. (Courtesy photo)
For eBay, this is part of a wider strategy to provide space for the digital exchange of collectibles as a whole. It is also making big investments in physical collectibles, including a new vault for trading cards that provides storage and a digital marketplace, and the $295 million acquisition of TCGPlayer, a marketplace for collectible trading cards like Magic the Gathering and Pokemon. Those goods will require specific tools to solve their own set of challenges, including authentication to ensure items are what they say they are, and ensure they are truly limited in quantity. Yet it is emerging alongside the digital collectibles, and it’s clear that eBay sees the two sides fitting under its tent.
“One reason that we're excited to launch the Vault is because it can enable real-time transactions for physical or digital goods,” eBay CEO Jamie Ianone said on the company’s recent second quarter earnings call. “This intersection is nascent, the one that collectible enthusiasts are increasingly exploring. This is part of the rationale behind our second quarter acquisition of KnownOrigin.”
A potential connecting point was made more clear on Monday, when Walmart entered the fray. The retailer announced a new partnership with the National Entertainment Collectibles Association that will result in a new platform, called AutoT, that enables digital collectibles.
AutoT will have a series of rare variants of collectibles and figures that are signed by stars and creators.
Here's how it works: To access the platform, customers will be able to purchase a box from Walmart that is tied to a specific pop culture property. Upon purchase, they enter the digital code found on their Walmart receipt into a personal account at AutoTVault.com. This reveals which collectible item they’ve received. Collectors will be able to store a digital collectible for up to two years free of charge in the NECA’s Vault, or have a physical item shipped to them.
Launching on Oct. 6 at Walmart’s website, the platform will debut with collectible figures from Teenage Mutant Ninja Turtles, featuring Shredder, Renet and Foot Soldier, with potential for fans to receive versions of the digital figures signed by co-creator Kevin Eastman. Exclusive lithographs from the TV icon and artist Bob Ross will also be available at launch. New products are set to drop at regular intervals, Walmart said.
A Shredder action figure. (Courtesy photo)
For Walmart, this is an extension into a new form of commerce as it looks toward the future of retail, which has long been built around physical goods. Coupled with last week’s announcement that it is building a large experience in Roblox, it’s clear the world’s largest retailer wants to have a presence wherever goods are being bought and sold. The throughline here is that digital collectibles can usher in an evolution of shopping.
“At Walmart, we are always finding new ways to bring innovation and one-of-a-kind offerings to our customers,” said Laura Rush, SVP of electronics, toys and seasonal at Walmart US, in a statement. “NECA’s unique collectibles and inventive AutoT platform offer a new type of shopping experience to shoppers, ensuring that Walmart is bringing the best in tech and entertainment to customers nationwide.”
This may be a test not only of the tools and shopping functions, but also where value is shown. Will a person find value in a digital work that can be linked to its creator in the same they would a physical work that has touched the artist's hands? In other words, can Bob Ross' resurgence courtesy of memes and YouTube translate to people wanting to own a piece of his work?
NFTs on Instagram. (Photo via Meta)
Given that art is involved, it's also worth considering what will happen when the gallery wall is removed. The ability to display and share collectibles in common spaces may also be valuable. One avenue arrived last week. Meta opened up the capability for users to share digital collectibles that they have purchased or bought on Facebook and Instagram to everyone. These collectibles can also be shared between the two platforms. Making good on an announcement it made in May, Meta said users can now connect a digital wallet and display NFTs from those wallets on the platform, The NFTs will have a shimmer effect, and public information like a description of the NFT can be displayed. The work can be attributed to both the creator and collector.
As Ianone referenced, these are nascent launches. They may not be the versions that last, but they are important steps toward pushing this form of collectibles into wide release. Provide the tools, figure out what people find valuable and new markets can take root.