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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, new firms seeking to empower creators working at the intersection of content and commerce attracted investment. Among well-known ecommerce companies, Purple received an acquisition offer, and Everlane raised new debt funding.
Check out the latest dealflow:
MrBeast and Night Capital cofounder Reed Duchscher. (Photo via Businesswire)
TCG, a media and tech investment firm, invested $100 million into Night Capital, a new firm cofounded with Reed Duchscher, the manager of YouTube star MrBeast. According to The New York Times, the firm plans to buy DTC brands, and pair them with creators who can create communities around the products. It will also support creators who seek to spin up their own brands. MrBeast has done this with MrBeast Burger, the restaurant chain that drew thousands of people to its Labor Day weekend store opening at the American Dream Mall in Seacaucus, New Jersey.
A unicorn has emerged in retail tech. Swiftly, a provider of software for brick-and-mortar retailers, raised $100 million in a Series C round that brings the company's valuation to more than $1 billion. The round was led by BRV Capital Management, and is the second $100 million funding round for the company in the last year. Swiftly helps brick-and-mortar retailers engage in digital relationships with customers, and offers a retail media network. "Our mission is to empower brick-and-mortar retailers to move from analog to algorithms, as winners in this new era of commerce will be determined by how fast they can reinvent their business to capture shoppers digitally and monetize those digital relationships," said Henry Kim, CEO of Swiftly, in a statement.
DTC clothing retailer Everlaneraised $90 million in debt, according to a release from Houlihan Lokey, which advised on the deal. The financing included a $65 million asset-based revolving credit facility and a $25 million first-in last-out term loan. Everlane is a portfolio company of L Catterton, Imaginary Ventures, 14W Ventures and Maveron. The funds were used to “refinance existing indebtedness and provide incremental liquidity for growth initiatives as well as to pay transaction-related fees and expenses,” according to the release. News of the deal, which closed on August 26, was first reported by Modern Retail.
FindMine, which offers dynamic content creation for brands, raised a new venture capital funding round that brings the company’s total outside investment to $9.9 million. Led by XSeed Capital and Underscore VC, the funding round will support go-to-market activities, and development of the company’s AI-powered content engine as it looks to take advantage of new datasets, such as inventory location. FindMine works with brands to personalize content across ecommerce, email campaigns, targeted messaging, advertising, social media and in-store applications.
flavrs, an app marrying food content and commerce, announced a $7 million raise as it launched in beta. The seed round was led by Andreessen Horowitz, with participation from Wellington Access Ventures, Cercano Management, Progression Fund, and firstminute Capital, along with prominent chefs Eric Ripert and Tom Colicchio. flavrs partners with chef-creators to provide recipe video tutorials that include a shopping-driven component. The company’s platform also includes a digital cookbook, meal planning and grocery shopping tools.
Prediko, a software company which helps ecommerce brands manage their inventory, raised $5 million in seed funding, TechCrunch reported. The round was led by Felix Capital, with participation from Zinal Growth, HelloWorld, NomadCapital and leaders from Klarna, Gorgias, Zencargo, Pigment, Ankorstore and Yoobic. Prediko’s product, called Inventory OS, allows brands to plan, order and finance their inventory, with the goal of preventing stock-outs and overstock.
Creatd, a holding company that empowers creator-founded brands through technology and partnership, raised $800,000 in a registered direct offering that will allow it to complete a restructuring plan. The offering extended the maturity of convertible debt to March 31, 2023. This will provide the company “ample time” to complete restructuring, and make progress in discussions on the sale of some assets and the spinoff of its media library, a news release states.
Inside a Purple Mattress showroom. (Courtesy photo)
Purple Innovation, the digitally native bedding company, received an acquisition offer from investment firm Coliseum Capital Management. Under the terms of the deal, Purple’s outstanding capital stock would be acquired for $4.35 per share, and the company would be taken private. The deal would be valued at about $362 million. The acquisition offer was described as an “unsolicited, non-binding proposal.” The company said its board of directors “will carefully review the proposal to determine the course of action that it believes is in the best interest of Purple and all Purple shareholders.” Purple earlier this month announced a deal to acquire Intellibed, the brand behind a gel-based mattress.
Starco Brands acquiredThe AOS Group, Inc., maker of Art of Sport body and skincare products. AOS was cofounded by the late NBA icon Kobe Bryant, and has a roster of athlete partnerships to promote post-game . Known as an inventor of consumer products, Starco Brands will apply manufacturing and marketing knowhow to the brand. In 2021, it partnered with musician Cardi B to launch Whipshots. Through the all-stock deal, which closed on Sept. 12, Metternich and the other AOS shareholders will become shareholders of Starco Brands.
PubMatic, a digital advertising company that offers a sell-side platform, is set to acquire Martin, a media measurement and reporting platform. The acquisition will deepen PubMatic’s investment in supply path optimization. It builds PubMatic’s expansion of tools over the last several years that are designed to allow “buyers to efficiently access inventory and audiences from top publishers around the globe,” said Rajeev Goel, CEO at PubMatic, in a statement. Terms of the deal, which is expected to close in mid-September, were not disclosed.
Liverpool, a high-end department store chain based in Mexico, acquired a 9.9% stake in US retailer Nordstrom, Reuters reported. "This operation represents an attractive opportunity to diversify assets geographically," Liverpool said. Terms were not disclosed.
Healthcare services company McKesson is set to acquire Rx Savings Solutions (RxSS) for $875 million. RxSS is a prescription price transparency and benefit insight company, which offers products to health plans and employers that are designed to help patients save money and stick to their prescribed medication regimens. The deal includes a $600 million upfront payment, and up to $275 million in additional payment, contingent on RxSS’ financial performance through 2025. Following the closing of the deal, which is expected in the second half of fiscal year 2023, RxSS will become part of McKesson’s Prescription Technology Solutions business.Fintech companyBolt and cryptocurrency infrastructure providerWyre have called off a planned merger deal, according to Wyre investor Ether Capital. In April, Bolt had announced plans to acquire Wyre for $1.5 billion. Now, the companies will remain independent businesses, and Wyre will instead enter a commercial services agreement with Bolt.
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.