# Boxed (2013 – 2023)

- URL: https://girisimcikafasi.com/en/startup-graveyard/boxed/
- Sector: E-commerce
- Country: United States
- Total funding: $243 million
- Cause of closure: Ran out of cash

## What did it do?

Boxed was a New York-based online retailer that sold the bulk-pack products found in wholesale clubs through its app and website, without charging a membership fee. It delivered orders within two days from warehouses in New Jersey, Nevada and Texas. The company also set up a unit called Spresso that offered its e-commerce infrastructure to other retailers as software as a service.

## Why did it shut down?

In 2021 the company merged with a SPAC called Seven Oaks Acquisition and began trading on the New York Stock Exchange, but it continued to struggle to raise funding. In March 2023, also hit by the collapse of Silicon Valley Bank, Boxed said it was considering filing for bankruptcy. On 2 April 2023 it filed for Chapter 11 and decided to sell its Spresso unit and wind down its retail e-commerce operations. Its shares were delisted, and its domain name and trademarks were put up for auction.

## The story

Living in New York, Chieh Huang missed being able to shop at wholesale clubs like the ones in New Jersey, where he grew up. That frustration became Boxed, which Huang founded in August 2013 with Jared Yaman, Christopher Cheung and William Fong. The first orders were shipped from Huang's garage in Edison, New Jersey.

The team, which had a background in mobile games, launched iPhone and Android apps first and the website a few months later. Boxed delivered bulk-pack products to the door without asking for a membership fee; the press called it the Costco for millennials. In 2016 it raised $132 million from investors including GGV Capital and DST Global, and in 2018 $111 million came from the retail group Aeon. In 2016 Forbes named it among the next billion-dollar start-ups. Huang also made headlines by announcing that he would pay the college tuition of warehouse workers' children out of his own pocket.

With warehouses in New Jersey, Nevada and Texas, the company delivered orders in two days and developed machine-learning features that predicted when customers would run out of a product. At the end of 2021 it moved into rapid delivery by buying MaxDelivery, a New York grocery delivery company, and that same year it merged with a SPAC called Seven Oaks Acquisition and began trading on the New York Stock Exchange. It also spun its software and services business into a separate unit called Spresso. In 2022 its BoxedUp loyalty programme reached around 32,000 members and $21 million in gross sales.

But going public did not solve the funding problem. In March 2023, also hit by the collapse of Silicon Valley Bank, Boxed said it was considering filing for bankruptcy, and on 2 April 2023 it filed for Chapter 11. Citing a difficult business environment, the company decided to shut its retail e-commerce operations and sell Spresso; its shares were delisted, and its domain name and trademarks were auctioned. The brand was bought by MSG Distributors in August 2023 and relaunched under its new owner in July 2024.

Boxed's story shows that a well-loved brand and an innovative operation cannot on their own carry a model that constantly needs capital. The company was reported to have turned down acquisition offers from Kroger; options not considered while cash was plentiful were no longer on the table when the crisis came.

## Lessons

- Going public does not solve a funding problem by itself; model your post-SPAC cash runway under pessimistic scenarios before the merger.
- Do not keep all your cash in one bank; the collapse of Silicon Valley Bank pushed an already fragile Boxed to the brink of bankruptcy.
- A strong brand and a loyal customer base will not carry a company on their own; take acquisition offers and strategic options seriously while cash is plentiful.

## Sources

- [Boxed, Inc.](https://en.wikipedia.org/wiki/Boxed,_Inc.)
- [Online wholesale retailer Boxed files for Chapter 11 bankruptcy](https://www.bloomberg.com/news/articles/2023-04-03/online-wholesale-retailer-boxed-files-for-chapter-11-bankruptcy)
- [Boxed to make return under new owner](https://www.winsightgrocerybusiness.com/retailers/boxedcom-make-return-under-new-owner)
- [Amazon's Ripple Effect on Grocery Industry: Rivals Stock Up on Start-Ups](https://www.nytimes.com/2018/08/21/technology/amazon-grocery-boxed-aeon.html)