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Dealboard: PepsiCo and Tempur Sealy invest, Valvoline sells

Check out the latest venture funding and M&A news in ecommerce and consumer goods.

Dealboard: PepsiCo and Tempur Sealy invest, Valvoline sells

(Illustration by The Current)

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, PepsiCo partners with an energy drink mover, while Tempur Sealy invests in sleep technology. Plus, startups growing new platforms for delivery and B2B payments earn backing from tech leaders.

Check out all of this week’s activity:

FUNDING

PepsiCo invests in Celsius

PepsiCo announced a deal with energy drink maker Celsius on Monday that includes a long-term distribution agreement and investment.

With the deal, PepsiCo will distribute Celsius in the US in retail and service channels, and accrue “preferred” partner status for the sports drink globally.

PepsiCo will also make a $550 million investment, and gain a seat on Celsius’ board of directors.

“We believe the opportunity to partner with a global best-in-class distributor provides Celsius with significant near-term additional shelf space in both existing retailers as well as new expansion within the independent retailers that represent a significant portion of the U.S. convenience and gas channel where approximately 70% of energy drinks are sold,” said Celsius president and CEO John Fieldly, in a statement. It also provides a strategic partnership that is expected to accelerate growth for both companies globally. In addition, this partnership will drive efficiencies allowing our teams to consolidate sales, marketing, and distribution efforts with associated cost benefits, which we expect to recognize once the initial transition is completed.”

Founded in 2005, Celsius has seen explosive growth in recent years. In the first quarter, revenue was up 167% year-over-year, to $133.4 million.

Balance raises $56 million for one-click B2B payments

Balance, an ecommerce payments company founded by PayPal alums, raised $56 million in a Series B round.

The round was led by Forerunner Ventures, with participation from Salesforce Ventures, Hubspot Ventures, Lyra Ventures, and Gramercy Ventures. Angel investors that joined the round included former Shopify CMO Jeff Wisener and Faire CTO Marcelo Cortes. Previous investors Ribbit Capital, Lightspeed Ventures, Avid Ventures, Upwest and Jibe supported, as well.

Launched in February 2021 by cofounders Bar Geron and Yoni Shuster, New York and Tel Aviv-based Balance seeks to bring a consumer-like payment experience to B2B transactions. The company said it has grown 10x by working with ecommerce marketplaces in industries like lumber, chemicals, steel, retail and food.

“For years, the consumer has led the charge in modernizing how we transact, but innovation in B2B commerce has lagged far behind the B2C space,” said Kirsten Green, founder and managing partner at Forerunner, in a statement. “There is incredible potential to modernize wide-ranging aspects of how B2B commerce is conducted in the digital age, and the market opportunity is enormous – only 7% of the $120 trillion B2B payment volume is conducted digitally today.”

Nash raises $27.8 million for delivery platform

Last-mile delivery platform Nash raised $20 million closed on a $20 million Series A round.

The investment was led by Andreessen Horowitz (a16z), which also invested in a prior $7.8 million seed round that was not previously announced. The round was also supported by Y Combinator, Rackhouse Venture Capital and individual investors who are leaders in the supply chain space.

In more funding news, the company also last week received the Ron Conway Economic Empowerment Award from Airbnb CEO Brian Chesky, Y Combinator managing director Michael Seibel and Conway, the founder and managing partner of SV Angel.

Founded by longtime science fair compatriots Mahmoud Ghulman and Aziz Alghunaim, the startup integrates with APIs from companies such as DoorDash, Lyft and Uber to allow businesses to receive quotes from delivery providers and select a service that is the best fit. a16z noted that the company has shown “extraordinary growth” since the Silicon Valley VC first invested.

“We invested in Nash because their unique model can be broadly applied to literally every vertical,” said Andrew Chen, general partner at a16z. “Whether it’s retail, food, or pharma, they’re empowering business and marketplaces to offer or greatly expand their delivery offering without having to build their own fleet. Nash has the team, expertise, and product to become the backbone of all local delivery across the globe, which is why we’re thrilled to have led both their seed and Series A.”

The startup’s founders are alums of MIT and the prominent accelerator Y Combinator, and are now looking to hire in engineering, operations, sales and more, Ghulman told Techcrunch.

Meal delivery startup Frolick raises pre-seed round

Frolick, a startup that is cooking up a model to deliver chef-prepared meals for under $10, raised $1.8 million in a pre-seed round.

Participants in the round included gategroup, and angels that are current and former members of Delivery Hero and Gopuff.

Founded by former Delivery Hero exec Jipy Mohanty, the startup concentrates on nutritious meals prepared in local commercial kitchens. It offers free delivery, with no order minimum. Launched in Northern Virginia in December 2021, Frolick is now expanding into Washington, DC. The company has built its own software to manage logistics and delivery. For meal preparation, it is partnering with Swiss multinational caterer gategroup and Travis Kalanick-founded startup Cloud Kitchens.

The investment will fuel hiring, marketing and geographic expansion.

“Our belief, especially in this economy, is that meal delivery won’t really take off for the masses until fees are eliminated,” said Mohanty, in a statement. “Frolick’s reception in NoVA has been very strong, and we’ve had hundreds of requests for service in DC and other cities. Our cost structure gives us a clear path to profitability, and we’re already working on a playbook for national expansion.”

Bryte raises $20 million for sleep tech

Restorative sleep technology company Bryte raised $20 million to expand its in-bed technology.

The funding was led by prominent mattress company Tempur Sealy International, with participation from ARCHina Capital and other existing Bryte investors.

With the deal, the two companies will collaborate on future products and services.

Bryte’s flagship product is The Restorative Bed, which has technology that makes personalized adjustments for comfort and relaxation. The product is used by celebrities, and found in luxury hotels. The company’s technology platform can also be integrated into the products of other mattress brands.

"Our mission is to empower lives through restorative sleep, which starts by reaching as many people as possible, with the most technically advanced products and first-rate services at a complete range of price points. There is simply no company in the world with a more complete and desirable portfolio of brands than Tempur Sealy, and we couldn't be more excited about their investment," said Luke Kelly, CEO of Bryte, in a statement.

THG, Softbank end investment deal

British ecommerce firm THG said it reached a deal to terminate an investment agreement with global investment firm Softbank.

In a filing, THG cited “global macroeconomic conditions” as the reasoning behind the parting of ways.

Formerly known as The Hut Group, THG runs over 100 websites that leverage its tech platform called Ingenuity, to take brands direct-to-consumer. It was founded by billionaire Matthew Moulding.

In May 2021, the company announced a deal with Softbank to create what The Guardian called "a complex joint venture" that would value a “yet to be formed” technology venture from THG at $6.3 billion. As part of the deal, Softbank made a $730 million investment.

MERGERS AND ACQUISITIONS

Frasers Group acquires I Saw it First

UK-based fashion retailer Frasers Group is set to acquire I Saw it First in an acquisition that will see the ecommerce platform combined with Missguided, another British ecommerce platform that Frasers bought out of administration last month.

“Frasers looks forward to integrating I Saw It First, which today has over 5 million consumers, having rapidly grown its digital presence since its launch in 2017,” Frasers Group said, in a brief filing announcing the deal.

While it’s a sign of further consolidation in UK ecommerce, adding two online retailers focused on women’s apparel gives Frasers Group room to build its position in the digital space with focus.

Delta Galil acquires Organic Basics

Apparel maker Delta Galil Industries said it acquired Organic Basics, a Denmark-founded brand that specializes in underwear, activewear and base layers.

Following the acquisition, Delta Galil is planning to expand the Organic Basics product line with a new collection that features additional items, including products for babies and children.

The acquisition will help Israel-based Delta Galil bolster its ecommerce business.

“Organic Basics is a digital brand with sustainability and ethical production at its core and these values align perfectly with Delta Galil’s focus on creating a more sustainable fashion industry through innovation,” said Isaac Dabah, CEO of Delta Galil Industries, in a statement. “We see a significant opportunity to grow the Organic Basics brand globally, particularly in the US and Europe, and to expand the product line to include items for the whole family. Our goal is to sell affordable, sustainable, organic products direct to the consumer.”

Valvoline sells products business to Aramco

Motor oil specialist Valvoline is spinning off its products division as it aims to focus on retail.

The company announced on Monday that it will sell the lubricants business to energy company Aramco for $2.65 billion in cash.

"We are pleased that our Global Products team will have a strategic new home with Aramco to further invest and grow the business while developing the brand into a global lubricants leader,” said Sam Mitchell, Valvoline CEO, in a statement. "The partnership between the world's leading energy producer and one of the world's most trusted global lubricant brands creates a powerful combination that delivers meaningful benefits to employees, customers — including the retail services business — suppliers and investors."

About $2.25 billion in proceeds from the sale will be used to accelerate the return of capital to shareholders, reduce debt and invest in the retail service business, the company said. The deal is expected to close in late 2022 or early 2023.

The spinoff will help Valvoline as it evolves its retail business to service hybrid and electric vehicles, which are growing in numbers.

NPD, IRI complete merger

Leading providers of data and analytics in the retail and consumer goods industry have officially combined.

Information Resources, Inc. (IRI) and The NPD Group completed a merger deal that was initially announced in April. The combined company will announce a single name and brand at a later date.

The combined company has retail relationships across 20 industries, and will combine expert insights with tech and visualization platform Liquid Data.

The company will be led by previous IRI CEO Kirk Perry, with senior leaders from both companies making up with executive team and board of directors.

"As one company, our world-class team will offer a total store read and greater share of consumer wallets and stomachs," Perry said, in a statement.

Private equity firm H&F is the majority investor in the combined company, while IRI investors Vestar Capital Partners and New Mountain Capital retain stakes.

JD Sports sells Footasylum

UK retailer JD Sports said it reached a deal to sell Footasylum to German asset management firm The Aurelius Group for about $45 million.

The deal comes three years after JD initially acquired Footasylum in a $119 million deal that brought together two prominent UK names in athletic and streetwear. However, the acquisition drew the ire of UK's Competition and Markets Authority, which ultimately ruled that it diluted competition and required JD to sell.

Footasylum operates 63 stores in the UK and seven websites, as well as warehouses. Going forward, Aurelius plans to invest in further digital capabilities.

“Footasylum has long been a staple of the UK high street and go-to shop for customers seeking high-end branded sportswear. As a standalone business, Footasylum has the potential to become an innovative retailer of sportswear and we are eager to unlock the company’s full potential. We believe that AURELIUS is ideally placed to support Footasylum’s transformation, which will be backed by our extensive operational expertise within the retail, digital and wholesale channels”, said Dr. Dirk Markus, founding partner of Aurelius, in a statement.

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