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Investing in Bulk: The Rise of the Wholesalers

Investing in Bulk: The Rise of the Wholesalers
June 17, 2021

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A year marked by empty shelves in the toilet paper aisle was also an incredibly lucrative one for the online wholesale retailer, Boxed. As part of the $55.5BN online grocery shopping market (2020), the company sold grocery and bulk items online to its 7MM users. After starting the company in 2013 from his parent's garage, founder Chieh Huang will be taking the company public through an $887MM SPAC deal with Seven Oaks Acquisition Corp.

Traditional wholesale companies include heavyweights Costco, BJ’s Wholesale Club, and Sam’s Club. But with e-commerce shopping continuing to rise post-pandemic, big-box wholesalers and online retailers like Amazon–which has Amazon Pantry as their bulk staples offering–are contending with private companies who might have greater brand likability and niche models. 

Out-of-the-Box Wholesale:

The success of Boxed is due in part to its popular model of zero membership fees and 20% off the first order, an enticing and easy offer when people are looking for ways to swap out their Sunday Costco runs for online orders. The customer base that started as coastal millennials has grown to include suburban and rural customers since the pandemic and has seen a 30% increase in mobile app users. 

Consumer Wholesale Private Companies:

Yamibuy: This southern California online wholesaler specializes in products from Asia, including beauty, kitchen appliances, and groceries. The company announced a test drive with autonomous carmaker Pony.ai to do contactless deliveries last summer. 

Weee!: Also specializing in Asian staples, this company focuses primarily on perishables you can’t find anywhere else. Weee! reached a $2.8BN valuation after its Round D of $315MM, led by Tiger Global Management.

Grubmarket: Farm-to-consumer marketplace Grubmarket has been on a buying spree of specialty food companies to reach nationwide expansion. Named one of Y-Combinator’s Top Companies in 2021, the company aims to go public in 2021 after raising a Series D of $90MM in February from deep-pocket investors like BlackRock and GGV Capital.

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398 Companies | 156 Funding Activities | 187 M&A Deals

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Finley Technologies raises $3MM from Bain Capital Ventures

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Macrometa raises $20MM from Pelion Venture Partners

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Bitwise Asset Management raises $70MM from Elad Gil & Electric Capital

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Booz Allen Hamilton acquires Liberty IT Solutions for $725MM

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