A popular eCommerce retailer, which has been called the “Costco for millennials,” is attracting potential investors, according to The New York Post. Both General Mills and Bed Bath & Beyond are considering investing in Boxed.com.
Boxed has become one of the most sought-after tech startups because its distribution centers, which can provide 24-hour delivery to consumers’ homes in many parts of the United States. With warehouses in New Jersey, Dallas, Las Vegas and Atlanta, Boxed offers bulk-sized products similar to those found at big warehouse retailers like Costco Wholesale.
The four-year-old online startup has also reportedly advanced negotiations with supermarket retailer Kroger, which is struggling to compete with Amazon now that it owns Whole Foods Market. CNBC, citing a person familiar with the matter, reported that a Kroger deal could value Boxed at between $325 million and $500 million. The idea of a sale came as the New York startup was looking for funding.
Boxed sells bulk items, including staples such as toilet paper and pet food, and delivers to consumers’ front doors. The startup expects to get competing offers in the coming weeks, noted the report, with Morgan Stanley is acting as its advisor.
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 will leverage its stores and Shipt’s proprietary technology platform and community of shoppers to bring same-day delivery to Target customers around the country.