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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 the ecommerce and consumer goods landscape.
This week, ecommerce entrepreneur Marc Lore raises $350 million for a new venture that aims to transform food delivery, Unilever forms a new venture to create plant-based ingredients for soaps and detergents and Grove Collaborative makes its debut as a publicly-traded company.
Check out the details on the latest deal activity:
Marc Lore’s Wonder raises $350 million
A Wonder delivery. (Courtesy photo)
Wonder, a food delivery startup founded by entrepreneur and former Walmart ecommerce head Marc Lore, raised $350 million in a Series B round.
The funding was led by Bain Capital Ventures, with participation from investors including Forerunner, Amex Ventures, Yieldstreet, Harmony Partners, and Watar Partners, among others; with participation from existing investors GV, NEA, Accel, General Catalyst and Alpine Group. The round values the company at about $3.5 billion, according to The Wall Street Journal.
Launched six months ago, Wonder combines food trucks and partnerships with well-known chefs to create mobile restaurants that arrive at a customer’s home and prepare orders.
Currently operating in New Jersey, the service is available in 22 towns to more than 130,000 households, Lore wrote in a LinkedIn post announcing the investment. The company has created 19 mobile restaurant chains, and partnered with chefs including Bobby Flay, Nancy Silverton, Michael Symon to create the menus for these ventures.
The size of the round caught the attention of many in the investment world for its size, especially as it came against the backdrop of warnings that venture capital is becoming less plentiful with a possible economic downturn on the horizon. Lore has something that investors prize in any macro environment: A track record of leading ecommerce companies to exit. He founded Diapers.com parent Quidisi and sold it to Amazon in 2010. Then, he founded Jet.com and sold it to Walmart for $3.3 billion in 2016. Lore went on to become CEO of US ecommerce at Walmart through 2021.
With Wonder, Lore's stated goal following the funding round is to stick with regional expansion in the short-term. The company plans to open 11 more mobile restaurants in the next year, and expand to more regions in the Tri-State area of New York, New Jersey and Connecticut. In the long-term, Lore told WSJ that the company wants to be the "super app for food."
“Wonder has a real opportunity to not only completely change how people eat, but also to create a better future with access to the world’s best food in a convenient, affordable, and sustainable way,” Lore wrote.
Grove Collaborative goes public
\u201cIt\u2019s a big day for sustainability! Today, we officially become a publicly-traded company. This milestone allows us to push even further #BeyondPlastic, transforming household products into a force for good. \n\nBecause sustainability is the only future, and what we do now matters.\u201d— Grove Collaborative (@Grove Collaborative) 1655478201
On June 16, Grove Collaborative became a publicly-traded company on the Nasdaq.
The sustainability-focused consumer products company went public through a merger with Virgin Group Acquisition Corp. II, a special purpose acquisition company founded by Richard Branson’s Virgin Group.
The transaction included an $86 million PIPE investment from new and existing Grove investors including Lone Pine Capital, Sculptor Capital Management, General Atlantic and Paul Polman.
Launched in 2016, Grove curates a marketplace of more than 150 eco-friendly products in categories including household cleaning, personal care, laundry, clean beauty, baby and pet care. This includes a mix of its own brands and third-party brands.
"Our path to profitability is clear and we will continue to advance our mission to transform consumer products into a positive force for human and environmental health. We expect the inevitable transition away from single use plastic will only accelerate as consumers increasingly demand more sustainable options, and Grove is leading the charge,” said Stuart Landesberg, Chief Executive Officer of Grove, in a statement.
Mondelēz International to acquire Clif Bar for $2.9 billion
Snack food maker Mondelēz International announced plans Monday to acquire nutritious energy bar company Clif Bar in a deal valued at $2.9 billion, bringing Clif, Luna and Clif Kid under its umbrella.
The deal will create a snack bar division valued at over $1 billion for Chicago-based Mondelēz, and adding to the company's foothold in "sustainable snacking."
“This transaction further advances our ambition to lead the future of snacking by winning in chocolate, biscuits and baked snacks as we continue to scale our high-growth snack bar business," said said Dirk Van de Put, Chairman and CEO of Mondelēz International, in a statement.
With the deal, Clif Bar will retain its headquarters in Emeryville, California, and production facilities in Twin Falls, Idaho, and Indianapolis, Indiana.
Clif Bar was founded in 1992 by Gary Erickson, who came up with the idea for a new energy bar while on a bike ride, according to the company's website. He and business partner Kit Crawford stepped aside as CEO in 2020 as former Tyson Foods exec Sally Grimes took the reins.
In 2000, the company received a prior offer of acquisition from Quaker Oats, but Erickson turned them down. The asking price: $120 million.
Unilever’s joint venture with Genomatica seeks palm oil alternatives
The $120 million venture will aim to create alternatives to palm oil and fossil fuel-derived cleansing ingredients that are key to the formulations of cleaning and personal care products because of their ability to lather and lift dirt. Used in a wide variety of products, palm oil is among the cornerstone commodities that have seen prices on the rise in recent months, and it is a driver of deforestation that contributes to climate change, according to the World Wildlife Federation.
The venture aims to leverage biotechnology from Genomatica to create plant-based ingredients for Unilever, which houses a variety of soap and detergent brands used in households every day.
“This new venture will sit at the intersection of science and sustainability, meaning we can continue to grow our business without relying only on palm oil or fossil fuel derivatives, while also making our supply chains more resilient from having access to ingredient alternatives,” said Unilever Chief R&D Officer Richard Slater, in a statement. “We will be marrying science and nature to make sure there is no tradeoff for our consumers between the efficacy and sustainability of their products.”
Little Leaf Farms raises $300 million
A Little Leaf Farms greenhouse. (Courtesy photo)
Sustainable packaged lettuce brand Little Leaf Farms raised $300 million in new capital.
The financing included equity funding from The Rise Fund, an impact investing arm of the prominent firm TPG, and debt funding from Bank of America.
Little Leaf Farms grows lettuce 365 days a year at a greenhouse in Devens, Massachusetts. It uses a controlled environment agriculture approach that includes soil-free hydroponic farming, captured rainwater, natural sunlight and solar-powered energy.
Following the funding, the company is planning to open a new greenhouse in McAdoo, Pennsylvania. This new farm will enable it to offer its products through the Northeast United States, and reach 3,500 retail stores. It set a goal of expanding to a total of 100 acres in its greenhouses by 2026.
PostScript raises $65M Series C for SMS marketing
PostScript, a startup which provides SMS marketing for Shopify stores, raised $65 million in Series C funding.
The round was led by 01 Advisors, the venture capital firm of prominent tech investor and former Twitter CEO Dick Costolo. It included participation from Twilio Ventures, Expanding Capital and m]x[v Capital, as well as existing investors at Greylock, Accomplice, Elephant and OpenView.
Founded in 2019, PostScript developed technology that allows brands to send text messages to customers. It found a foothold when the pandemic arrived, as brands looked for new marketing approaches to reach customers in their homes, according to a blog post from company president Alex Beller announcing the deal. PostScript now works with over 8,000 brands, including Brooklinen, Homesick, Native, Spikeball and Kopari. TechCrunch reported that the company currently has 230 employees, up from 61 in 2021.
Going forward, the brand plans to add new features, offer brands solutions to take action and develop best practices for SMS marketing.
“We believe that the future of SMS marketing is not just about sending mass advertisements to customers,” Beller wrote. “It’s about texting with them. It’s about customization. It’s about interactivity. It’s about optimizing your strategy—from copy to timing.”
Allyson Felix’s Saysh raises $8 million
Allyson Felix (Photo by Doha Stadium Plus Qatar, used under a Creative Commons license)
The financing was led by specialist consumer fund IRIS and Athleta, the performance lifestyle brand of Gap Inc. Redpoint Ventures and Springbank Collective also participated. Springbank brought together a group of angels to invest through a special purpose vehicle. These investors include gender and policy expert Anne-Marie Slaughter, New York Road Runners CEO Kerin Hempel and Sabia Wade, founder of The Black Doula and Black maternal health advocate.
Saysh focuses on championing women, and released a debut sneaker called the Saysh One. It also operates the Saysh Collective, a community that offers access to product drops, connections with others, workouts and member perks.
Following the funding round, the brand plans to scale in ecommerce, wholesale distribution and retail. It also plans to expand its product line, including the launch of several new sneakers.
With the deal, Gap Inc. has acquired an equity stake in Saysh, and the brand’s footwear will be featured on Athleta.com. The partnership between Allyson Felix and Athleta dates to 2019, when the brand signed Felix as its first sponsored athlete after she left Nike over its treatment of pregnant women.
Metaverse fashion platform SKNUPS raises $3.5 million, partners with Dolce & Gabbana
SKNUPS, a digital collectibles platform for fashion and beauty creators, raised $3.5 million in pre-seed funding.
The financing included participation from web3 and fashion influencers. It brought together angel investors and traditional funds, including Redrice Ventures, Blue Wire Capital and Adelpha.
Along with the funding, SKNUPS said it signed a partnership with iconic fashion house Dolce & Gabbana to bring the Italian company’s style into video games.
The London-based company’s technology creates digital collectibles with 3D fashion models that are available across web2 and web3. Its platform also provides infrastructure to release these collectibles through approaches such as NFT drops. The company said it is planning to announce more collabs with brands and fashion leaders in the near future.
“Brands and creators who want to establish a scalable presence in digital worlds have to balance high-end with access,” said SKNUPS CEO Fred Speirs, in a statement. “Fashion in the metaverse should be accessible beyond a small core of celebs and high net worth VIPs to communicate the transformative power of style and craftsmanship to the next generation of fans.”
ReturnGO raises $6.5 million to help brands manage returns, and offer alternatives
The ReturnGO team. (Courtesy photo)
AI-powered returns management platform ReturnGO raised $6.5 million in a seed round.
The round for the Tel Aviv, Israel-based company was led by TPY Capital fund, along with participation from funds including Cresson, Good Company, SeedIL and Aristagroa. Angel investors such as Yuval Tal, Dan Adika, Benny Schneider and Haim Bar-On also joined the round.
Founded in 2020, ReturnGO makes a SaaS platform that helps brands manage returns and exchanges for products sold on ecommerce sites. It offers a customer-facing interface that offers several return alternatives that are tailored to behavior patterns. According to the company, these include:
- Return the product and receive a full refund
- Get an incentive to buy another product from a data-driven personalized list
- Donate the product to a social organization
The company's technology has been implemented in 1,500 Shopify stores, including Decathlon.“We have been able to turn returns from a painful financial problem into a lever of revenue and improve the relationship with customers,” Aviad Raz, cofounder and CEO of ReturnGO, said in a statement. “Most customers who return products and receive a full refund suffer from a slow and cumbersome process, and will probably not buy again on this site – so the damage is greater than just the canceling of a specific transaction."
Trending in Economy
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.