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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 news across the ecommerce and consumer goods landscape.
This week, celebrities back a DTC-born cereal brand's push into retail, and the NBA backs smart textiles. Plus, lab grown-diamonds attract new investment, while an online jewelry retailer is set to return to the public markets.
Cereal brand Magic Spoon raises $85M from HighPost, celebrity investors
The funding round was led by HighPost Capital, and is joined by institutional investors including Siddhi Capital, Coefficient Capital, Constellation Capital, Carter Comstock.
A slate of celebrity investors also participated in the round, including Shakira, Russell Westbrook, Halsey, The Chainsmokers, Nick Jonas, Amy Schumer, Odell Beckham Jr. and Nas.
Launched in 2019 by Gabi Lewis and Greg Sewitz, Magic Spoon started with a direct-to-consumer model for its high protein, low-carb, grain-free cereal. With flavors like Fruity, Cocoa and Peanut Butter, the products are designed to inspire nostalgia while offering healthy ingredients.
Following the financing, the company is planning a retail rollout for the rest of 2022. It will debut in Target, then plans to launch in a variety of big box stores and natural grocers in the coming months.
bttn raises $20M for medical supply ecommerce
bttn, a technology company focused on healthcare distribution, raised $20 million in a Series A financing.
Led by Tiger Global, the round values the company at $110 million.
The Seattle-based company’s platform is designed to simplify the process of buying name-brand medical supplies. It focuses on medical practitioners, businesses and emergency responders. The company said it has done business with 7,000 customers in a year since its launch, with more than 1,000 orders made on bttnusa.com. In April, the company added eight distribution and fulfillment centers.
“The Series A investment will help us scale and accelerate growth, allowing bttn to support more customers with a best-in-class shopping experience,” said JT Garwood, CEO and cofounder of bttn, in a statement.
LUSIX raises $90 million for lab-grown diamonds
A pyramid diamond from LUSIX. (Courtesy photo)
Lab-grown diamond producer LUSIX announced a $90 million investment, led by LVMH Luxury Ventures, Ragnar Crossover Fund and More Investments.
Founded by inventor Benny Landa, Israel-based LUSIX was spun off from Landa Labs in 2016. The backing of LVMH signals support from a leader in luxury.
With the new financing, the company is planning to start construction this summer on a solar-powered production facility. It will be the company’s second facility that runs on 100% solar power.
U Beauty picks up an investor
Products from U Beauty. (Courtesy photo)
U Beauty, the luxury skincare brand founded by influencer marketing pioneer Tina Craig, received a minority investment from consumer-focused investment firm Sandbridge Capital.
It’s the first institutional capital for the brand, which has a suite of products developed with technology that is designed to target areas of the skin with high levels of damage. The company’s products are currently available at Violet Grey, Net-a-Porter, Nordstrom, Bergdorf Goodman and Saks Fifth Avenue.
U Beauty is one of those rare mission driven brands that we have had the good fortune to partner with over the years, with its authentically modern clean beauty approach and importantly differentiated brand positioning,” said Sandbridge Founder and Managing Partner Ken Suslow, in a statement. “We are excited to contribute our experience in helping to build enduringly successful global brands in support of U Beauty's demonstrably strong foundation."
Recover raises $100 million for recycled cotton production
(Image via Recover)
Recover, a company which makes recycled cotton fiber and cotton fiber blends, raised $100 million in new funding.
The financing was led by Goldman Sachs Asset Management’s sustainable investing business, which is investing with majority shareholder STORY3 Capital Partners.
Recover aims to bring a sustainable alternative to the apparel supply chain. Its recycled cotton fiber helps to save water and reduce carbon. Currently, the company works with Primark, Inditex, C&A, Revolve and Lands’ End.
The company now plans to increase production capacity. It recently opened new manufacturing hubs in Pakistan and Bangladesh, and is planning to open additional hubs in Bangladesh and Vietnam in the near future.
Juni raises $206 million
Swedish fintech company Juni announced the close of two funding rounds.
First, it raised a $100 million Series B equity round led by Mubadala Capital. This included participation from investors including EQT Ventures, Felix Capital, Cherry Ventures, and Partners of DST Global.
Second, the company raised $106 million in venture debt financing from TriplePoint Capital.
The company offers a financial management platform that brings together physical and virtual cards, credit cards, accounting, analytics and digital advertising platforms.
“With this funding, we will help ecommerce businesses win by building the right insights, features and integrations while injecting capital into their marketing spend,” said Samir El-Sabini, cofounder and CEO at Juni.
Nfinite raises $100 million for 3D ecommerce
Nfinite, a technology company with a focus on visualization and ecommerce merchandising, raised $100 million in a Series B round.
The funding was led by software investor Insight Partners, with participation from existing investor US Venture Partners.
Nfinite makes a SaaS-based visual merchandising platform for ecommerce, which allows retailers to create and manage product visuals using CGI technology. The company said its technology has been adopted by three of the world’s top five retailers, and is looking to provide tools for marketers exploring the metaverse. It is looking to grow a marketplace for talent and tools in the 3D ecommerce space.
With the financing, Insight Partners Managing Director Rebecca Liu-Doyle will join the company’s board of directors.
Going forward, the company plans to expand its customer, engineering, and marketing operations.
Nextiles raises $5 million from DraftKings, NBA
Smart fabric technology maker Nextiles raised $5 million in a Series A funding round.
The round for the New York-based company was led by Drive by DraftKings, with participation from the NBA, Madison Square Garden Sports Corp., Alumni Ventures, SmartSports, Phoenix Capital Ventures and Newlab. It also includes participation from ice hockey star Hilary Knight.
Blending flexible electronics and sewing technology, Nextiles is developing smart threads that can be sewn into a fabric and measure mechanical changes with Bluetooth as the fabric bends, stretches and twists. With this, the company said it can provide force analytics and 3D motion capture from compression clothing. It is currently working in tennis, baseball and is aiming to expand in basketball.
Reflex raises $4.5 million to connect brands and retail ‘superheroes’
Reflex cofounders Mike Meyers and Carson Jones. (Courtesy photo)
Indicator Ventures led the round, with additional investment from Sugar Capital and Red Swan Ventures. Previous investors in a $1.45 million pre-seed round also joined, including ATX Venture Partners, Precursor Ventures, Active Capital and Clutch VC.
The company also attracted angel investors including former J. Crew, former Coach North American Retail Division president and former Staples CEO Ron Sargent, as well as RetailMeNot founder Cotter Cunningham and Favor CEO Jag Bath.
Reflex’s dual-sided marketplace is designed to connect retailers and associates to work in stores. It uses a model of “flex” work, which lines up workers with retail experience, but does so in a way that provides on-demand work. Going forward, Reflex plans to expand across Texas, and add additional US retail markets over the next 18 months.
Blue Nile set for SPAC
Online jeweler Blue Nile is set to go public through a merger with a special purpose acquisition company, the companies announced on Friday.
The deal to combine with Mudrick Capital Acquisition Corporation II is expected to provide $450 million in capital, and value the company at $873 million. Blue Nile will list on the NASDAQ under the name MUDS. The company will be led by the current management team, including Blue Nile Chief Executive Officer Sean Kell.
Founded in 1999, Blue Nile brought the purchase of diamond engagement rings to ecommerce. It now has a variety of jewelry offerings, and ships to 44 countries, including China, the U.K., Canada, and Australia.
“As the pioneer of and category leader in online fine jewelry, Blue Nile is well positioned to win as the go-to ecommerce destination in the space,” said Jason Mudrick, Founder and Chief Investment Officer of Mudrick Capital Management, L.P., in a statement.
This marks a return to the public markets for Blue Nile, which was taken private in 2016 via acquisition by Bain Capital Private Equity, Bow Street and Adama Partners.
The deal is expected to close in the fourth quarter of 2022.
Automotive ecommerce platforms join forces as TrueCar acquires Digital Motors
TrueCar acquired automotive retail and fintech platform Digital Motors.
Based in Irvine, California, Digital Motors helps dealerships go omnichannel. The company provides auto dealers, lenders and others with tools to augment a physical presence with a digital storefront or marketplace.
With the deal, TrueCar plans to grow its TrueCar+ marketplace, which was described in an announcement by TrueCar CEO Mike Darrow as an “asset-light marketplace where consumers have easy and transparent access to a national inventory of vehicles and our dealers have efficient and turn-key access to a national audience of consumers.”
Darrow called the acquisition a “key step” in adding ecommerce capabilities, and added that the company will benefit from the expertise of Digital Motors’ team.
Pet platform Antelope acquires Diggin’ Your Dog and Super Snouts
Launched in August 2021, Antelope was created by private equity firm Alpine Investors and CEO Wendy Wen. It is aiming to build a next-generation conglomerate of natural pet brands.
Diggin’ Your Dog and Super Snouts was founded in 2011 by Christy Love and her partner Dawn Love. Christy Love will remain CEO. The company’s products will be offered on Antelope alongside nature pet treats brand Bocce’s Bakery and digital insurance and training provider Doggo.
Tencent acquires stake in Flipkart from cofounder Binny Bansal
Chinese tech company Tencent acquired a $264 million stake in India-based ecommerce platform Flipkart. According to the Times of India, the deal gave Tencent a 0.7% stake in the company, while Bansal now owns 1.8% of the company.
It comes as Flipkart, which is backed by Walmart, is planning an initial public offering in 2023. Its latest-reported valuation target is $60-70 billion.
Highsnobiety acquired by Zalando
German fashion and lifestyle platform Zalando acquired a majority stake in luxury culture-focused media platform Highsnobiety.
Founded in 2005 by David Fischer, Highsnobiety today includes a publishing arm, creative consultancy and a curated commerce platform. It is set to retain its editorial autonomy in the deal.
“Both of our companies share a passion for building strong brand partnerships and enabling brands to inspire audiences with their products and stories," David Schneider, Zalando’s founder, said in a statement. Partnering with Highsnobiety will allow us to execute much faster on our ambition to offer the most relevant and engaging - as well as convenient - shopping experience to our customers. I’m excited to see our joint vision materialize and to shape the future of fashion content in commerce together”.
The deal marks a confluence of commerce and media. Zalando said its platform is a destination for "inspiration, innovation, and interaction." Now it is bringing an editorial voice into the fold with a reputation for tastemaking.
SBBC and Jones Soda cancel merger plans
Finally, here’s a quick update on a change to a merger we reported earlier this year.
Simply Better Brands Corp. and Jones Soda won’t go forward with a merger deal that was initially announced in April. The omnichannel platform and craft soda company cited “unfavourable market conditions.” When it was announced, the deal was valued at $98.9 million. However, the letter of intent between the two companies has now been terminated.
“We are disappointed that due to current market conditions we are unable to move forward with our intended transaction at this time,” said Kathy Casey, CEO of Simply Better Brands, in a statement. “The Jones Soda brand is one we felt confident would add tremendous value to our existing platform and ultimately be accretive to shareholder value. We wish Jones management and their board much success in their future.”
Trending in Brand News
Campbell Soup Company CEO Mark Clouse offered thoughts on messaging amid inflationary shifts in consumer behavior.
After months of elevated inflation and interest rate hikes that have the potential to cool demand, consumers are showing more signs of shifting behavior.
It’s showing up in retail sales data, but there’s also evidence in the observations of the brands responsible for grocery store staples.
The latest example came this week from Campbell Soup Company. CEO Mark Clouse told analysts that the consumer continues to be “resilient” despite continued price increases on food, but found that “consumers are beginning to feel that pressure” as time goes on.
This shows up in the categories they are buying. Overall, Clouse said Campbell sees a shift toward shelf-stable items, and away from more expensive prepared foods.
There is also change in when they make purchases. People are buying more at the beginning of the month. That’s because they are stretching paychecks as long as possible.
These shifts change how the company is communicating with consumers.
Clouse said the changes in behavior are an opportunity to “focus on value within our messaging without necessarily having to chase pricing all the way down.”
“No question that it's important that we protect affordability and that we make that relevant in the categories that we're in," Clouse said. "But I also think there's a lot of ways to frame value in different ways, right?”
A meal cooked with condensed soup may be cheaper than picking up a frozen item or ordering out. Consumers just need a reminder. Even within Campbell’s own portfolio, the company can elevate brands that have more value now, even if they may not always get the limelight.
The open question is whether the shift in behavior will begin to show up in the results of the companies that have raised prices. Campbell’s overall net sales grew 5% for the quarter ended April 30, while gross profit margins held steady around 30%. But the category-level results were more uneven. U.S. soup sales declined 11%, though the company said that was owed to comparisons with the quarter when supply chains reopened a year ago and expressed confidence that the category is seeing a longer-term resurgence as more people cook at home following the pandemic. Snacks, which includes Goldfish and Pepperidge Farm, were up 12% And while net sales increased overall, the amount of products people are buying is declining. Volumes were down 7%.
These are trends happening across the grocery store. Campbell is continuing to compete. It is leading with iconic brands, and a host of different ways to consume them. It is following that up with innovation that makes the products stand out. Then, it is driving home messaging that shows consumers how to fit the products into their lives, and even their tightening spending plans.
Campbell Soup is more than 150 years old, and has seen plenty of difficult economic environments. It is also a different business today, and will continue to evolve. At the end of the day, continued execution is what’s required.
“If it's good food, people are going to buy it, especially if it's a great value,” Clouse said.