Boxed Says ‘No Thanks’ To Kroger’s $400M Offer

After reportedly turning down Kroger’s $400 million acquisition offer, Boxed plans to seek a new funding round to stay private, Bloomberg reported.

The board of Boxed voted to turn down the offer last week, according to a person close to the matter. While the wholesale startup had early talks with Amazon, Target and Costco, the source said that only Kroger offered a bid, and that Boxed has a valuation of $470 million.

Now, the company will follow CEO Chieh Huang’s original strategy: He wished that the company stay private and then go public in the future.

Compared to Amazon, Boxed offers fewer products – and items in bulk sizes. As a result, the company uses less space and manpower in filling more orders.

In addition, Boxed boasts an average customer order of $100 and an order size of 10 items. The website is also an attractive sales channel for CPG companies looking to offer their household products online.

Boxed sells bulk items, including staples such as toilet paper and pet food, and delivers to consumers’ front doors. In 2015 – with just 30 employees and three warehouses – Boxed raised $25 million in a Series B round of funding. The investment was led by GGV Capital and Digital Sky Technologies, with participation from Founders Fund, AME Cloud Ventures and Vaizra Investments.

Boxed is not alone in the home delivery space. The startup competes with Walmart’s Jet.com, which was founded by Marc Lore. Lore is known for founding Diapers.com, which he sold to Amazon in 2009. Target, too, is focusing on home delivery, with its $550 million cash acquisition of Shipt, an online same-day delivery platform that is growing in popularity. At the time, the retailer said it would leverage its stores and Shipt’s proprietary technology platform and community of shoppers to bring same-day delivery to Target customers around the country.