Boxed Wholesale is taking in cash to ramp up its fight against Amazon and Costco, but that won’t include a penny from Chinese e-commerce giant Alibaba.
The company plans to announce today that it has closed its $100 million Series C funding round. Safa Partners joined existing investors GGV and DST Global to seal the deal, its CEO Chieh Huang told Business Insider. That brings its total funding to around $132 million, according to PitchBook.
Not in the picture? Alibaba.
In November 2015, rumours swirled that the Chinese e-commerce giant Alibaba was poised to make a big splash and ramp up its fight with Amazon.
Separately, Business Insider had heard a rumour that Alibaba had actually made an aggressive takeover offer.
But Huang called these reports “patently false.”
Instead, the press-shy Huang said his team has tried to stay out of the headlines and focus on building the next generation of bulk buyers.
Boxed specialises in delivering bulk goods like an Amazon/Costco hybrid. But instead of walking the aisles of a warehouse, customers shop via an app from their phones or their computers.
Huang argues that he’s not stealing customers away from the big box stores like Costco, BJ’s, or Sam’s Club. Instead, Boxed is converting a customer base of over 80 per cent ages 25 to 44 to changing their habits to bulk buying instead of purchasing one-off.
“When you look at it, it’s not much of a surprise that the vast majority has not walked into a warehouse in the last six months,” Huang said.
Unlike the other wholesale retailers though, it doesn’t cost a membership fee to join. The startup launched in 2013 and now delivers anywhere in the US, typically in under three days. The company also has an on-demand option that will deliver fresh wholesale items, like milk or vegetables, in NYC, New Jersey, Boston, and Atlanta.
Part of its success has been in curation, rather than trying to offer every product. There’s only so many kinds of toilet paper worth stocking, he jokes.
“We only have 1,000 items for sale. You’d think that totally clashes with us, but we only want to curate a limited assortment that most people will like and trust,” Huang said.
The new $100 million round will go toward building out the 80-person team and expanding awareness. Facebook ads, a boon for many e-commerce startups, will likely see a chunk of it, he said.
One person familiar with the situation said that the round values the company at $400 million.
Huang wouldn’t comment on the valuation of the company, other than to say the company wasn’t near “unicorn” status — the nickname for companies that have raised at a billion dollar valuation.
“We’re still very tiny when it comes to the overall scheme of things. I feel lucky that we had investors that believed in mobile commerce,” Huang told Business Insider.